Are You Ready for Your First Investment Property?
Real estate can be one of the most lucrative investments and is often considered a path to wealth building. If you’re considering acquiring your first investment property consider the following guidelines to help with preparation. Our team of experts is also here to help with any questions you may have about this exciting next step in your real estate journey!
Take Stock of Your Skills
Many first time investment property owners start with a fixer upper and plan on doing at least some renovations themselves to save money. Having a realistic understanding of your home repair abilities can help you assess what you may need to outsource. If your investment property is move in ready, you’ll still want to take stock of your ability and available time to manage the property and deal with renters.
Prep Your Finances
You want to be in the best financial position possible when purchasing your first investment property. Paying off debt is ideal before you invest in a rental property. If that’s not possible, you should know exactly what’s needed to make your debt payments each month. Never purchase an investment property if it puts you in danger of not being able to make your monthly debt payments.
Location, Location, Location
Just like your personal home search, location is key for an investment property. Good school districts, low crime, and close proximity to amenities and shopping are good places to start. Depending on your ideal renters, your most important location criteria may change. For instance, renting to college students versus seniors will make a difference is how you choose your location.
Taking the Long View
If done right, your investment property can deliver financial returns for years to come. Before you buy, you want to look for signs of growth in your chosen location. Consider the following questions when assessing the are for long-term growth.
Is the city or town thriving?
Are people moving into the area?
Are there new jobs in the area?
Is the city or town making investments into infrastructure?
Is there a good mixture or green space, shopping, and entertainment?
Consider the Costs
There’s more to consider when buying an investment property than just the purchase price. In addition to purchase price, you’ll need to calculate property management fees, insurance, the mortgage payment, and maintenance and repairs. You’ll want to determine what your monthly costs are compared to the income you can generate to make sure it’s a smart investment.
There are important decisions to make before you sign the dotted line to purchase your first investment property. With careful planning you can enjoy the rewards of real estate. At KKHomes our team of experts can help you find the right investment property for your goals. Contact us today to discuss this important step for your financial future!