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6 Basic Principles To Understand About Owning Multi-Unit Houses In Real Estate Investment

Although property investment in Real Estate Investment has always considered to be a good investment decision, it takes knowledge, understanding, planning, and care to choose the best from the Real Estate Investment Companies we have in Lagos now! After years of experience as a property investment company in Lagos Nigeria and a company who has invested a lot of time in real estate; we at Switchlanes Investment Limited find these 6 basic principles important; and valuable decisions to make before investing in buying rental property.

Understand that Down Payments in Real Estate Investment are usually High:

When buying multiple unit houses for renting purpose; lenders take into account the amount of money it will take to request for a homeowner’s loan. Although procedures and conditions are often different; the standard of delivery is 20% for potential investor who will dwell in the rental property for sale while 25% for an investor who is not willing to stay in the rented property.

Additional needs or predicted income for the property investment

Lenders usually offer loans for single-family housing depending on their decisions and the repayment ability of the borrower portfolio. However, loans are given to the multi-units housing owners depending on the conditions of meeting up with repayment requirements based on predicted revenues from rents; the loan amount, the expected costs, and the investment. This is done to reduce the risk to the lender!

Proper Accounting for the Real Estate Investment

Find out in advance the total cost of owning and managing your real estate funds. The following factors should be considered; owner’s responsibilities for property taxes, fees, maintenance, repairs, finances, cleaning between owners; upkeep of common areas maintaining the land, etc. All of these costs should be taken into account when making a purchase decision for the rental property.

The 6% Rule in Real Estate Investment

A smart rule of thumb; let’s call it the 6% Rule. The revenue made from the investment minus the cost spent by the owner is the cashflow from the investment. This means unless/until the real money reaches at least 6% profit, there is no cashflow from the property investment!

75% of the occupancy guidance

When calculating the expected amount that will be made from the property investment; remember that there will be vacancies during some period. Ensure that during this period; the market exchange rate credit does not reduce the amount of profit less than 75%. Also, keep an eye on this contingency!

The Real Estate Investment Must Be Easy to Rent or Find

Consider the specific rental property or investment property for sale and if will be difficult to rent when there are vacancies; it might not be a good Real Estate Investment for beginners. Find out how long it will take on average to rent a similar property in this region!

Make Smart Decisions when looking for the types of real estate investment to engage in your next property investment company. Landfix Investment is a Real Estate crowd funding initiative by Switchlanes Investment. It gives property investors the opportunity to invest in Real Estate and earn returns of up to 60% in cash; while the capital invested remains intact. To benefit from our Landfix Investment Project, click here

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