Hello to the forum and thank you for taking the time to read and respond.
I inherited an apartment outside the US that worth about 700k. I've been living in the Los Angeles area for a while (renting) and I am thinking of selling the apt. And getting 2 properties, one to live in and one to rent out. As of now the rent I am getting from outside the country is used for renting an apt here.
Sience I've never bought/sold a property I have a tones of questions.
1) will it be wiser to pay for the new property in full or get a mortgage?
2) what does purchasing a home intailes? (taxes ect)?
3) I know the LA area should I invest there or somewhere else where the market is more profitable?
4)how can I find realtor I can trust? (no one I know deals with real estate.
5) what else should I know (I'm sure there is a lot I'm not even asking...)
thank you again for taking your time with a first timer like me
The questions you posed are not something that can easily be answered. In essence you are asking us to tell you where, when, why, and how to invest in Real Estate. I could write a book and still not cover everything but I will answer from a broad viewpoint with some advice.
1. It depends. No two properties are alike and no two people have the same financial situation. How long do you plan to hold the property? What is your credit rating because that determines the interest rate and ability to get a loan? What is the value of the home? What is the rental rate you will receive? What is the age of the home and what type of repairs do you foresee in the next X number of years? What type of return do you want for your money? All these questions and more should go into determining your approach. With that said SMART investors ALWAYS leverage themselves and use other's money in addition to their own.
2. A lot of things go into buying and then selling a home. Generally speaking the buyer pays about 3% of the sales price and seller about 8% of the sales price. These are round numbers clearly and not exact but good estimates. If you are a Realtor that value changes and if you can change the commission rates the selling value changes. You need surveys, appraisals, loan fees, tax fees, title insurance, title fees, property taxes, HOA fees, attorney's fees, repairs, inspections, just to name a few.
3. Personally I only invest in an area of which you are familiar. Too many risks in Real Estate and unless you have millions available don't try an area you know nothing about.
4. Interview many!!!! Don't use one just because your neighbor utilized some lady at Re/Max and sold her home. Don't use John because he claims he can advertise better than Julie. Don't assume someone with a name brand company is any better than a small local Realtor. I can assure you they are not. You want someone that is experienced in your area, has investment background preferred, actually cares about your situation and willing to go the extra mile.
5. Yes there is a lot you are not asking. What about property management? Are you willing to remove a tenant that doesn't abide by the lease agreement? Do you know how? Are you nearby and able to verify the tenant is obeying the lease? What happens if you find out the tenant buys a pet after already in the home? Can you perform good credit and background checks on prospective tenants? Who will you get for repairs because things will break? etc., etc.
You're ahead of the game, Leeronika. Being a member of a great forum such as this one and having a 700K windfall are both in your favor. If you're looking to sell your property and then invest in real estate your best bet is to pay cash for anything you are going to live in and/or rent out. Good luck.