According to many sources, right now is one of the best times to purchase investment property. The historically low interest rates coupled with low home prices and high numbers of people looking to rent all create a perfect condition for investment. The following are 5 important tips to keep in mind when looking to score your investment property.
1. Options. Know what options are available for investment properties and decide which the right fit is for you. Are you looking to fix up houses and flip them? Or, are you looking to rent long term to a family or buy commercial?
2. Consult a Professional. A well connected real estate agent has great resources and often will know about properties before they hit the market therefore offering you greater potential savings. The agents are experts in their field and are able to guide you along the process and prevent you from making common mistakes of first time investors.
3. Location. Of course the old adage of location, location, location should not be lost on the first time investor. Make sure that the location you are looking to purchase in will appeal to the type of renter you are seeking. If you are looking to rent to families then make sure there are good schools in the area and numerous amenities nearby.
4. Finances. Meet with your financial advisor and tax accountant to figure out not only what you can spend, but what all the total costs of owning a rental property entail. What are tax advantages/disadvantages and what type of cash reserve should you be prepared to have.
5. Final Decisions. What type of landlord do you plan on being? If the thought of late night calls regarding A/C or plumbing issues make you cringe then you might want to invest in a property management company. For a small percentage this company will take care of all tenant and/or maintenance issues allowing you to relax and enjoy your investment income.
Ultimately, when looking to invest your money into a property you must do your due diligence which includes a lot of research. Treat the decision to invest like a part-time job and get all the information you can so that you can make an informed decision. There is always risk associated with investment, but by taking the right steps you can score your first successful investment property. Good Luck!
