Things to consider before Buying an Investment Property

Factor’s to Consider before buying a property for investment


Owning a property is not always easy, let alone paying, maintaining, and other associated headache that you have with your first property will be doubled. However, real estate is one of the best investment that you can possibly have as long as you have planned and saved more than enough what is needed to pay for before purchasing the property.

It’s spring time and some of you might be thinking of buying a second property. I found this article in to help you decide or to guide you in purchasing your investment property.

8 Things to Consider When Buying Investment Property

By David Schepp |

Whether you’re considering purchasing a multi-unit complex for immediate rental, buying a home now with the idea of selling it a few years or profiting from the purchase of a fixer-upper that can be resold at a much higher price, here’s what to look for when considering real estate as an investment:

  • Plan on a big down payment. Mortgage insurance isn’t available for investment properties, so a 20 percent down payment is required to get traditional financing. And putting even more down can result in a better rate. Also, loan costs are generally higher for investment properties.
  • Enjoy being handy and fixing things. Opting for the landlord route brings with it lots of challenges, including making repairs. Be sure to have enough savings on hand to handle any unexpected repairs in the short term – before the rent checks start rolling in.
  • Income varies. Tenants come and go, and it may take a while to rent out a just-vacated unit – especially if it needs substantial repairs or rehabbing, reducing your income. But you’ll still have to pay the bills, including mortgage, property taxes and insurance.
  • Property taxes. Depending on the type of rental property purchased and how long it is kept, investors could discover a big increase in property taxes, if a homestead exemption had been in place for the previous owners.
  • Beware of fixer-uppers. If you’re new to investing in real estate, beware of taking on a bigger challenge than you can handle. Unless you have the skills for large-scale improvement – or know someone who does quality work at bargain prices – you’ll likely pay too much to rehabilitate the property and still make a profit on its sale. A better option is to look for properties that need modest repairs that are priced at below-market rates.
  • Start small. While repairs present a challenge, so can buying a larger property than you’re ready to handle. Starting small – purchasing a single apartment, condo or duplex, for example – can help you get grounded in the idea of investing in real estate and decide whether it’s really the right step for you.


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