Anyone that’s been reading books on securing their financial future knows how important it is to buy an investment property.
It is one of the best ways to guarantee a secure financial future for you and your family. Generally, an investment property refers to a home you buy that you can lease out or use to generate income.
If you’re not sure where to start, peruse some of the tips below before you venture into buying your next investment property.
#1 Establish whether an investment property is the right choice
Many factors come into play when investing in real estate.
It’s not about buying property and making money every month. Investment properties need time and commitment, with active participation, even when you hire property managers to maintain it.
Investment properties are also capital-intensive. Buying a unit is not only expensive but requires some maintenance to remain competitive.
The market can also be unpredictable at times, leaving you in a state of limbo as an owner. When you decide to sell, investment properties aren’t always liquid and may even take several months to sell
#2 Getting the right team
The chances are that you won’t have the time to manage your new investment property yourself.
You’ll need a team of professionals around you continually, even when you are hunting for the right investment property to safeguard your hard-earned wealth.
The right team will help you acquire proper valuations, as well as the best locations with excellent returns on investment.
Some of the professionals at Team Couch, for example, include:
- Real estate attorneys
- Home inspectors
- Insurance agents
- Real estate agents
#3 Decide the type of property and location
One of the early decisions you have to make regarding an investment property is the type of building you are acquiring and details of the location.
You have a choice between a single tenant or multiple tenant buildings, for example. Low-maintenance condos are also an excellent option for hassle-free investment properties.
The right investment means developing the right budget. A single-family unit costs less than a multiple tenant unit, for example.
The location also plays a crucial role in the price of the property and the potential return on investment. One way to cut down the initial cost of the investment is to look for deals that need a bit of renovation and cleaning. It might require more effort, but the long-term returns will likely be worth it.
#4 Getting your property investment financing
Not many people can pay cash upfront for a dream investment property.
If you are looking for financing options for your investment property, you will need stellar qualifications. Investment properties are usually considered a higher borrowing risk compared to financing your home.
Get the right financing for your situation between conventional and asset financing options. There are other options available as well, such as 401k loans, second home financing, home equity, or house hacking. Speak to your bank today to see the choices you have for your investment property financing.
For more information or advice on investment properties or other real estate, contact Team Couch today.