Rental property investment advice and how to ensure you make the right choice
The Investment Definition refers to the agreement between two parties, where one is a seller and the other one is the buyer, that they shall exchange goods between one another under a written agreement. Therefore, if you’re currently thinking about buying rental property and it’s the first time you’re considering it, then it’s safe to say you have a lot of things to learn about it in order to avoid making costly mistakes.
“To dare is to lose one’s footing momentarily. To not dare is to lose oneself.” — Soren Kierkegaard
Surround yourself with professionals
As a first time buyer, you certainly know very little about the Investment Purchasing Procedure, so that is why it’s recommended you hire an investment property lender, a property inspector and also a real estate agent to help you with this. Assisting you should also be a third party manager and an attorney.
Market research
Researching the market you plan on investing in is very important and you can easily learn all there is to know about this by asking your real estate agent to give you data on typical rent levels and the market’s demographics. Of course, the local crime levels are also very important, since they directly affect the price and you certainly won’t like to pay a premium price for a building in a bad neighborhood and later on find out you could’ve purchased the same one in a much better neighborhood.
Your down payment funds
At this point your real estate agent will give you solid Advice About Purchasing Your First Rental Home, especially if you decided on the building you want to get. You need to be able to easily access your funds, so make sure you put your down payment in an account that can easily facilitate that. In general, the lender shall decide the exact amount you require, but it’s reasonable to have a minimum of 30% of the buying price of the available rental.
Preapproval process
At this point you’ll need to go through the lender’s preapproval process and if you want to secure a large loan, then your credit needs to be in very good standing. In general, you’ll need a 20% down payment and you’re also going to have to provide the lender with info such as proof you can manage the rental property, bank statements and tax returns.
Since this is the first time you plan on buying investment property, ready yourself for receiving several rejections before you find a lender willing to work with you. However, if you’re not sure about this and you’re asking yourself “Should I buy an Investment Property or Rental Home”, then talk to your real estate agent about this. He’ll make it easier for you to understand the pros and cons of each type of property.