When you are buying a home for yourself and your family you are paying attention to your own personal needs and wants in that home. The factors you look at have to do with your current plans and future plans in that home as your life and family grows. As a continuation or part of the post we had about things to consider when buying a home for yourself, we are going to talk about factors to pay attention to when buying a rental property (www.aminvali.com).
What initially matters is your intent with the property. Are you planning to rent it out to long term tenants? Is it a fancy vacation home? Do you want to fix it and sell it for a profit? Based on this decision you then have to pick the right location. What does this mean? For example, a vacation home has to be near the most popular tourist attractions and be close to the amenities a vacationer would need and want. A property that you want to sell for profit after fixing it has to be located in a competitive real estate market so that you can make sure to sell it for profit and lose money on the renovations.
When buying a home for yourself you can get away with a lower down payment, however, with an investment property you will need a larger down payment. You will need 15% to 20% minimum. This will narrow down your choices of properties based on your intent, the location, and your budget.
You then must sit down and do some math, it might be faster and easier to get in touch with a real estate agent who works on investment properties (www.aminvali.com) or with a real estate investment group like the Amin Vali Consulting Group.
You need to calculate the cost of the property you intend to buy, and any expenses you may have before renting the property out including maintenance costs each month or before flipping it. A common real estate rule is that a rental property should allow you to bring in 1% per month. 1% of the cost of the property after all your expenses.
For a property you plan to fix and sell, you need to determine your profit threshold and calculate the estimated costs for the repairs and the potential value of the renovated property.
There are many financial factors to consider when buying an investment property, be sure to do your research and talk to a real estate professional.
Civil Engineer, MBA, Real Estate Agent
Cell phone: +1 (949)220-1000
Phone : +1(310)925-3878
Web : http://www.aminvali.com
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Realtor in Zutila Inc.