For centuries, real estate has been an excellent way to invest money and grow wealth. Some of the wealthiest members of our societies made their fortunes by investing in real estate. If you are considering following their example and buying an investment property, there are several things you need to consider before signing the paperwork.
Do You Have Enough Saved Up?
Evaluating your finances is the first thing to do when determining if you are ready to move into property investment.Â Buying an investment property is different than buying a primary residence. For one, you must have a 20% down payment because mortgage insurance is not available for investment properties. You should also make sure that you have enough money readily available to cover any problems you may encounter before you begin to get rent payments. If you don’t think you do, you should make a savings plan.
Who Will Be Managing the Property?
It’s also important to consider the day to day running of the property. If you are not sure about being a landlord, you should investigateÂ rental management Tacoma WA. Rental managers can do the hard work of property management for a fee and are worth hiring if you feel like you won’t have the time to devote to being a landlord.
What’s the Right Location?
When researchingÂ where to buy an investment property, you should think about who your prospective tenant is and what they are looking for. Maybe you live in a university town and want to rent to students. You should look for properties that are close to campus and near shops and restaurants that appeal to students. Do you want to rent your property to a family? Then you should consider homes close to good schools.
If you feel like you have the right answers to these questions, you are probably ready to buy your first investment property. The next step is to contact a local realtor and start visiting properties. You are on your way to investing your money and getting great returns.