Hi everyone,
I`m new to all this, so please be patient with me. I`ve enjoyed reading what many of you have said on the forum.
I have a few newbie questions that I`m hoping some of you may have opinions on. First though, let me explain my situation so that you`ll have some idea of my starting point.
I`ve been at my job now for over 4 years and things are very stable there. I bought a house 4 years ago and have been living in it since. Between mortgage payments, prepayments and increasing market value, I estimate that I have about $200K in equity in my home right now. I have no trouble affording my mortgage these days, and my work is very stable.
That brings us to today, and to be honest, I`m bored with living such a basic life. I`ve always been interested in investing and real estate, so at the beginning of this summer I decided that I would like to try and pursue real estate investing as a way of getting some extra cash flow. So far, I`ve done a bit of reading and have been watching the types of properties that are coming available in my area pretty closely. I do have some questions though that I hope someone more experienced than I can help me with.
-First question: Should I start big? When I do some basic calculations, it always seems to me that the best way to go would be to purchase a multi-unit building (fourplex, etc) as opposed to a single-unit structure and work from there, even though this would require me to start out with a larger mortgage. But how much debt should I really take on? I can work the basic numbers easy enough, but without experience, I`m worried about hidden costs and little expenses that may come up.
-Second question: Should I start a business? Do people that take real estate investing seriously carry their properties in their own name or do they manage everything through a business? What would you suggest for someone just starting out? I know there will be tax and liability advantages either way, but what about the ability to get financing, etc? Any thoughts would be very appreciated.
-Third Question: Are products like landlord insurance worthwhile? Obviously I will insure the property itself, but should I pay to insure the rental income?
-Fourth Question: Is there a distinct advantage between buildings that have individually metered utilities and those that do not? I like the idea of tenants being responsible for their own utilities, but at the same time, I can see the advantages of centrally managing such things. My gut tells me that individually metered utilities would be better in the long run, to avoid the damages caused by tenants leaving windows open all winter long and cutting into my profits.
-Fifth Question: I like books. Can anyone suggest some `must read` material that I should become familiar with? I believe that it`s good to get educated, then get busy.
Thanks in advance for your help.
I`m new to all this, so please be patient with me. I`ve enjoyed reading what many of you have said on the forum.
I have a few newbie questions that I`m hoping some of you may have opinions on. First though, let me explain my situation so that you`ll have some idea of my starting point.
I`ve been at my job now for over 4 years and things are very stable there. I bought a house 4 years ago and have been living in it since. Between mortgage payments, prepayments and increasing market value, I estimate that I have about $200K in equity in my home right now. I have no trouble affording my mortgage these days, and my work is very stable.
That brings us to today, and to be honest, I`m bored with living such a basic life. I`ve always been interested in investing and real estate, so at the beginning of this summer I decided that I would like to try and pursue real estate investing as a way of getting some extra cash flow. So far, I`ve done a bit of reading and have been watching the types of properties that are coming available in my area pretty closely. I do have some questions though that I hope someone more experienced than I can help me with.
-First question: Should I start big? When I do some basic calculations, it always seems to me that the best way to go would be to purchase a multi-unit building (fourplex, etc) as opposed to a single-unit structure and work from there, even though this would require me to start out with a larger mortgage. But how much debt should I really take on? I can work the basic numbers easy enough, but without experience, I`m worried about hidden costs and little expenses that may come up.
-Second question: Should I start a business? Do people that take real estate investing seriously carry their properties in their own name or do they manage everything through a business? What would you suggest for someone just starting out? I know there will be tax and liability advantages either way, but what about the ability to get financing, etc? Any thoughts would be very appreciated.
-Third Question: Are products like landlord insurance worthwhile? Obviously I will insure the property itself, but should I pay to insure the rental income?
-Fourth Question: Is there a distinct advantage between buildings that have individually metered utilities and those that do not? I like the idea of tenants being responsible for their own utilities, but at the same time, I can see the advantages of centrally managing such things. My gut tells me that individually metered utilities would be better in the long run, to avoid the damages caused by tenants leaving windows open all winter long and cutting into my profits.
-Fifth Question: I like books. Can anyone suggest some `must read` material that I should become familiar with? I believe that it`s good to get educated, then get busy.
Thanks in advance for your help.
