Property is a good investment when the investment is made in real estate property that holds market demand. If you are looking for a sound real estate investment, here are some wise tips to follow.
Make sure it pairs well with you – Know that rental properties will need maintenance and if you are not able to do your repairs by yourself, chances are that you will have to spend on repairs which can be expensive. Start off by learning what you will need to know to be a landlord before you decide if you want to invest in a rental property.
Pay down debt first – If you have student loans, unpaid medical bills or have children who need to attend college, buying a rental property on loan may stretch your limits.
Get the down payment – Investment properties require a larger down payment than owner-occupied properties. They also have stricter approval requirements. Hence, look at saving 20% of your total property price before looking for a lender.
Beware of higher interest rates – Interest rates on investment properties can be high, therefore make sure you budget for all your other expenses and calculate if you can afford monthly loan payments.
Calculate your margins – Note that your property will also require payments for insurance, property taxes and monthly expenses such as pest control and landscaping. Add these expenses to your cost and then calculate if the income you will receive is sufficient.
Legal documents – When looking to buy a property it is best to speak to a lawyer who will go through the properties ownership details and ensure that you have a property that is clear of any disputes.
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