A Start up Budget is an estimation or projection of income and expenses for a new business. Start-up costs are expenses to get the doors open. On-going costs are expenses that go on with the day-to-day running of your center.
The last point to think about affecting South Florida real estate is the escalating costs of Web Site and property taxes. These increasing costs are putting more downward pressure on real estate prices.
Next, take a look at the condition of the property. Like most landlords you would probably expect to need to make some changes to a property before you put it on the rental market. That’s understandable, but do not get carried away. Always keep a close eye on your budget and remember that this is a business and not a hobby. Don’t make unnecessary changes that add nothing to the value of the property and beware of larger, structural work. If you need to spend thousands on your property it will massively impact on your return on investment.
Get your electrical and water installations done professionally. Many times, fires will be caused by faulty wiring. As much as you can, get a professional to do it for you. This is for your own security as the owner and occupier, but also for the insurance company. They take poorly done electrical wiring and plumbing very seriously because they know that fires and flooding can happen any time.
Having dead-bolt locks on every exterior door will bring down your home insurance rate. It’s harder for thieves to break into homes that have such locks. The more protected your home is against burglary, the less the risk taken in insuring it.
You might be feeling like a sound financial plan leaves no room for fun or enjoying life’s pleasures. On the contrary, your plan should serve your individual needs and put you on the path to financial freedom. If you dream of driving a luxury vehicle or taking a cruise around the world, your plan should factor in the costs so you know you are creating a financial future that is real and lasting – not just a “mirage”.
Document every aspect of the damage to your property or the contents. That means taking photographs or a video, and keeping a diary of all the events so you can write up a full report for the agent or claims adjuster. The key issues are the value of property damaged or lost, and the cost of repairs. Hopefully, you have kept the receipts for all the bigger ticket items to set a baseline value.
In terms of research, it is much harder to do your homework and analyze properties, compared to other investment types (like stocks, mutual funds, bonds, etc.). That is because other investments have larger number of transactions.
C.Are you prepared to run a business? Owning real estate (unless it’s your personal residence) requires you to run a business that you may not consider a valuable use of your time.
Don’t – Pay off old judgments or old collections to try to improve your credit score. Often times this will LOWER your scores. If the lender requires you to pay these off or you just want to pay them off, you can do it during or just before or after closing on your home.