Investment properties provide extra income but also require extra work and consideration. Here are some things to contemplate before you purchase an investment property:
- Think about whether you’ll be doing the repair and maintenance work, or if you’ll be hiring someone to handle that. Also, will you be managing the property yourself or will that be outsourced as well? Remember to consider both of these items as they will impact the potential profit for an investment property.
- Consider paying down debt before purchasing an investment property. Pay off student loan debt, unpaid medical bills, and even ask if it is the right time if you have kids going off to college soon or other financial circumstances arising.
- Start small or with a live-in property. A condex or one-unit rental will allow you to start small and see if you enjoy being a landlord. Or if you’re looking for a home for yourself as well, consider a multi-unit building and occupy one while you rent out the other units.
- Find the right property. Look for good school districts, low crime rates, low property taxes, and close to amenities that renters would be interested in, such as shops, parks, malls, public transportation and restaurants.
- Think about the finances. It’s always great to have renters that always pay on the first of the month and occupy all of your units. However, the reality is that you can be faced with vacancy and untimely rent payments. Remember to always have an emergency fund to take care of unexpected expenses. Don’t forget other expenses such as insurance, property taxes, landscaping, etc.
If you have more questions about investment properties our Mortgage Lending Specialists would be happy to help you – email us at firstname.lastname@example.org or call us at 800.645.4728 ext. 3810.