Purchasing an Investment Property

What do I Need to Know About an Investment Property?

Below is a list of things to consider before buying an investment property.

What is an Investment Property?
An investment property is a real estate property that has been purchased with the intention of earning a return on the investment, either through rent, the future resale of the property or both.

Can you comfortably afford an Investment Property?
Investing in a rental property can be used as a strategy to build your wealth, but it can also drain your assets. To minimize the risk it can be helpful to consult a real estate attorney or accountant for advice. It’s also a good idea to determine if you can handle long-term ownership with unpredictable cash flow. Don’t forget to consider that there will likely be a period of time before your investment starts generating income. During that period, you’ll have to make loan payments on the investment property from your regular income.

Do You Want To Be the Landlord?
There are two ways to approach renting your property: you can manage the rental or you could hire a property management company. If you can’t invest the time and effort into managing the property yourself, you should hire property managers that keep you informed about your rental and your tenants.

Determining What Kind of Investment Property to Purchase
If this is your first investment, you might want to consider starting with a smaller rental, which typically has a smaller loan payment that is easier to make. You will also want to consider the location of the property. If it’s far from home, you should spend some time in the area to look around the community and check out home prices.

What are your Financing Options?
There are many ways to fund your investment property purchase. You might be able to use the equity you’ve built in your primary residence to finance your rental property. Loans for investment properties typically require a larger down payment than a primary residence.

Contact us and we can walk you through your options. Or get started today with this form.