Buying Your First Investment Property

Buying your first investment property can be a very exciting time in your life. After all, you are getting ready to take a huge step toward solidifying your financial future. Of course, no matter whether looking for Nasvhille real estate or a new home in Naples, if you choose poorly, an investment property may not providing you with the type of residual income you were hoping for. Therefore, as you prepare to purchase your first investment property, be sure to keep these five simple tips in mind.

Tip #1: Save Up for a Down Payment

Most lenders require a down payment of at least 25-30 percent of the cost of the cost when purchasing non-owner occupied property. Therefore, you should be sure to save up the necessary funds before you even start looking.

Tip #2: Know the Cost of Ownership

When purchasing real estate, it is important to keep in mind that there are more costs involved than simply paying the mortgage. Other expenses will include insurance, property taxes and routine maintenance. You will also need to make repairs as necessary and there will be times when your property is vacant and not bringing in any income. By calculating these costs, you will be better able to determine if purchasing an investment property is truly right for you.

Tip #3: Know Your Rights and Responsibilities as a Landlord

In addition to exploring the costs involved with owning an investment property, you should also take the time to learn more about your rights and responsibilities as a landlord. Not only will you need to run credit checks and contact past landlords when screening potential tenants, but you will also be responsible for handling any maintenance issues that develop. Furthermore, if you run into problems with a tenant, you will need to be well-versed in how to handle these problems as well as how to complete the eviction process if necessary.

Tip #4: Choose a Good Location

Everyone knows that the first rule in purchasing real estate is location, location, location. The same holds true when purchasing investment property. A good rule of thumb is to purchase property in the best location you can afford. Not only will this help guarantee a sound return on your investment, but it will also help you attract the best tenants possible if you plan to rent out the property.

Tip #5: Be Realistic About Renovations

A great way to score a good deal on an investment property is to choose one that needs a little bit of work. At the same time, you don’t want to get yourself into a situation where you will have to spend thousands of dollars to get the property up to speed. Furthermore, unless you are a skilled worker with experience in the area of home renovations, you should hire someone to do the work rather than trying to do it yourself.

About The Author - Josh Anderson specializes in Nashville area real estate, including 12 South homes for sale, as Realtor for Nasvhille Keller Williams.