Today we are talking about how to buy an investment property and my tips on how to do it. Are you ready? Lights, camera, action!
Hello everyone, thanks for checking out this video about how to buy an investment property. My name is Ashley Jurney and I am a realtor with Town Realty in Charlottesville Virginia and we want to help YOU move smarter… You can learn more about us by visiting our website TOWNCVILLE.COM
Whether you’re considering purchasing a multiunit complex for immediate rental, buying a home now with the idea of selling it a few years or profiting from the purchase of a fixer-upper that can be resold at a much higher price, here’s what to look for when considering real estate as an investment:
Plan on a big down payment. Mortgage insurance isn’t available for investment properties, so a 20 percent down payment is required to get financing. And putting even more down can result in a better rate. Also, keep in mind loan costs are generally higher for investment properties.
Enjoy being handy and fixing things. Opting for the landlord route brings with it lots of challenges, including making repairs. Be sure to have enough savings on hand to handle any unexpected repairs in the short term – before the rent checks start rolling in.
Income varies. Tenants come and go, and it may take a while to rent out a just-vacated unit – especially if it needs substantial repairs or rehabbing, reducing your income. But you’ll still have to pay the bills, including mortgage, property taxes and insurance.
I highly recommend hiring a property manager to take care of these handyman items and a multitude of other issues that come up as a homeowner or landlord. They typically charge about 10% of the rent but its well worth the money. They can usually find tenants a lot quicker than you and just one month of vacancies could really eat into your profit so hire someone who can get tenants out and back in fast!
Beware of fixer-uppers. If you’re new to investing in real estate, beware of taking on a bigger challenge than you can handle. Unless you have the skills for large-scale improvement – or know someone who does quality work at bargain prices – you’ll likely pay too much to rehabilitate the property and still make a profit on its sale. A better option is to look for properties that need modest repairs that are priced at below-market rates.
Start small. While repairs present a challenge, so can buying a larger property than you’re ready to handle. Starting small – purchasing a single apartment, condo or duplex, for example – can help you get grounded in the idea of investing in real estate and decide whether it’s really the right thing for you.
Choose your partners wisely. If you can’t afford to buy property on your own and wish to enlist co-investors, be sure you’re comfortable not only with your business partner but the agreement struck up to purchase and manage the investment. You never know when things might go sour.
If you are interested in purchasing an investment property, reach out to me and fill out my investor buying criteria form!
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