What you Should Know About Buying Investment Property

Decide What Type of Investment Property you want to Buy

You will need to determine which type of investment property will fit into your strategy and lifestyle.  Do you want to become a landlord, or would you rather buy, restore and resell (flip) houses. Are you interested in investing in commercial property or apartments? These and more questions you will need to answer before buying investment property.  Right now is the perfect time to invest in foreclosed properties.  And it is the easiest of the investment properties.

Buying Investment Properties

It is a great idea to research out investment clubs (groups of investors working together to make money), investment agent/brokers with lots of experience in buying investment properties and family and friends who have already bought investment properties; for help and advice.  Developing a lasting relationship with an agent/broker is a good idea. Look around and talk to several agents and find a team that you can trust and be comfortable working with. Your property investment agent/broker can help you with funding and finding the perfect foreclosed property for you.

Location is Important

There are millions of foreclosed homes throughout the country and it is predicted by the Fed that there will be one million homes added every year for the next several years. You will want to start out with a property that is close by your home base. This way you are close enough to take care of matters without a lot of expensive travel. You will want to buy an investment property that is in a good location to schools (a good school district), shopping, entertainment, and freeways. Avoid busy streets. Find a home that you would like to raise your family in; large fenced yards, cull de sacs where children can play safer, etc. Remember, someday you may want to sell this house….so think resale, when looking.

Landlord or Management Company?

If you are close by and have the time, being a landlord could save you a lot of money. But, you should keep in mind that it will be you who receives the call in the middle of the night saying, the roof is leaking. Also, it will be you who will collect the rent, deal with late fees and legal problems, like eviction. But, if you have an ironclad rental or lease agreement on the front end and strict policies in place, you may even like it. Your agent/broker can help you with all the paper work, local laws and ordinances, yard maintenance companies and repairmen or home warranties. You will also want to get a good accountant. On the other hand, a good management company can save you from all that, by doing it for you. They will have many plans you can choose from that include all services or just a few. They usually cost about 6% of the monthly rent.

It is a Great time to Buy Investment Property

The time may never be better. The sellers are motivated, the loans are there and the interest rates are great. If buying investment property is something you always wanted to do; now is the time to jump in with both feet.