Investment Properties in Minneapolis & St. Paul

Choosing the right property-  Remember you'll have expenses other than the mortgage, taxes and property insurance. Get a good spreadsheet to help you analyze your investment. Budget for taxes and insurance, the utilities you'll be responsible for, general maintenance and building upkeep. - contact me for spreadsheet

Location-

Get the most up to date information on current sales and actives in the area. The market is changing weekly as the economy recovers. How to pick a n'hood- chose areas you are familiar with and like. Choose properties walking distance to college or university. Choose properties convenient to public transportation or with easy freeway access. Choose properties near local shopping, coffee houses and parks. The best locations will offer a little of each.

Leases-

Find current rents. Craiglist.org is a great resource to find what the going rate is for a particular area. A building in a better area may cost more but should also be bringing in higher rents. It's not necessary to buyer a property at a low price if you're willing to wait out the market for a while.

Look at the lengths of leases and the time tenants have been there.  If rents seem low, renewing a lease is the time to raise rent to reflect market rate. Although try to avoid having frequent tenant changes. It is worth it to have quality tenants, consider a rent slightly under market rate just to keep them around.  Have a comprehensive lease that is fair, complies with all fair housing and nondiscrimination laws, clearly explains deposits, responsibility of utilities, and covers all bases. I have a standard state of mn lease, contact me

Utilities-

 Do tenants pay their own heat? Electric? Be prepared to possibly pay these and other basics.  Budget accordingly! Expect to pay trash and water bills for the buildings.  A jump in the water bill can indicate a water leak or plumbing problem, something that you'll want to know about as soon as possible to head off damage and more damage. Additionally, an unpaid water bill can become a property tax assessment, if you are in control of the bill you can assure that won't happen. If you want tenants to pay the water bill, divide bill fairly and charge tenants per month but it's important to keep the bill coming to your residence and remain in control of it.

A seller should provide you with utility bill information; you can always get that info by calling the utility companies directly. They will tell you average costs.

Capital improvements-

See what has been done recently. What systems are nearing replacement?  Just because a boiler may need replacement soon, does not mean you should disregard the building.  Improvements have tax advantages and making your building more energy efficient will save you money.  Making improvements can attract you a better quality of tenants, allow you to charge more rent and keep stable tenants and control your major expense categories, such as, utilities and ongoing maintenance and repairs.

Maintenance & General repair-

Who will shovel and mow the lawn? Plan for the little things that can go wrong. Who will fix them? Have a handyman ready and willing or be sure that you are skilled in minor maintenance issues and be sure to know when to hire a professional. Apartment turnovers are a good time to scour the unit, take care of preventative maintenance and give it a fresh coat of paint.  Be sure to have a reserve fund to for clean up, apartment turns and rent loss.

 

Financing-

The right terms and conditions can make all the difference in whether a building will work or not. In today's mortgage industry, expect to put 20-25% downpayment on a property that you do not intend to owner-occupy. A mortgage broker who specializes in real estate investors is a great person to speak with as soon as you are considering making an investment. Because the banks are not loaning money easily, seller financing is becoming popular again.

Exit Strategy-

Are you looking for passive income or a retirement plan? Is real estate your child's college fund or their off campus living? The way you are looking to use the investment affects what you should purchase. Get a team of supporters around you. Get to know a Tax Accountant,Insurance Agent, Realtor, Handyman, Inspector and Contractors.  The right help and support will lessen your stress and maximize your profit.

Investing in Real Estate

Top Reasons to Invest in Real Estate

Contact Me

Find Your Next Home Using Our Real Estate Map Search