Home Investing 101: Never Lose Money Again

If you buy investment properties and sometimes lose money, there are things you can do to minimize this risk. ​We buy houses Los Angeles​ is an effective way in some cases to get under-market value homes and use them as good investments. Below is more information about this complex topic.

Are You Ready to Be a Landlord?

One of the key issues in  buying rental properties​ and making money is being prepared to be a landlord. While you can have contractors do your repairs, this can be expensive and eat away your profits.

When you are first starting, it’s a good idea to do your own repairs, so you should be able to fix a toilet, repair drywall, and install new locks. But if you buy a lot of properties, you will eventually be able to outsource your repairs to contractors. Just make sure you have firm control over what the contractors charge.

Find The Right Place

One of the most critical factors in making money with home investing is buying in the right location. You want to be a reasonably priced property but in an area that is increasing in value, not declining. If you buy in too bad of a neighborhood, you will deal with crime and property damage, plus a lot of late rent.

Buy Cash or Finance?

Some investors buy cash, while others finance. It depends on how you want to invest. Paying cash means you’ll have more cash flow because you aren’t paying a mortgage. But paying all cash also means you can’t buy as many properties. If you finance properties at 4% and put 20% down, you have less cash flow but your annual return on a $20,000 investment is much more than someone who paid $100,000 cash.

Buy At The Right Price

A common blunder for the new investor is to pay too much for their first property. This can sign you up for losses from the start. You need to carefully calculate your monthly expenses, including expected vacancies, to determine how much you can pay, after you make your desired profit. If you can’t get the price you want, keep shopping.

These tips will make it more likely that you’ll make money on your investment properties. Most new investors lose money on their first deals, but with this knowledge, you could be an exception.