When it comes to purchasing the first investment property, a smart investor will study up, and research the market. These 10 easy tips for buying the first investment property in one’s portfolio will give all the necessary indications to finding the right property, the right time to buy, and the right time to sell.
1) Where is it located?
A prime location is near good schools, landmarks
2) Is the property dividable?
If there isn’t already a home built on the land, the investor may wish to rent out a house or duplex on the property. To do so, dividing the property may be a prerequisite. Especially in the case where two homes are to be built on the same property. If there is not enough allotted space for construction, the permission will be denied.
3) What is the yearly property tax? Knowing the exact year-by-year cost will save an investor a lot of bookkeeping time.
4) Check a lot of different mortgage offers from banks. Some will be great opportunities, others will rip off the investor..
5) Get the loan pre approved.
6) Prepare a 5% deposit, as this is a standard practice in property purchases.
7) Start saving for the property. Using a CD, or other savings method is a great way to be prepared for the purchase and various fees that are involved.
8) Prepare the proper documentation.
9) Look for the property using newspapers, craigslist, and other resources available to investors and future home owners.
10) Purchase a property that is within a comfortable price range. Take into account the future of the family, other business ventures, and how much risk one is willing to undertake.
For the smart investor, it pays to be cautious when making that first investment property purchase. So keeping in mind the location, future prospects that are indicated by the property’s amenities, whether or not the property is dividable using government forms, and the cost of year-by-year property taxes the smart investor will make the right choice with confidence.