Looking for an Investment Property? Here’s What to Look Into

Every year, millions of individuals across the United States purchase and invest it properties for rental purposes. A rental property can be a great way to set up a recurring source of income for you and your family.

However, there are several important things to remember when purchasing a rental unit. The following guide provides simple tips and tricks for researching and purchasing an investment property.

Deed

When purchasing an investment property, it’s essential to make sure that the property has a free and clear deed.

If the deed to the property has a lien from either taxes or civil judgments, you may be responsible for that as the new owner.

It’s a good idea to have an attorney and conveyancing professional to look into things on a property before making the decision to purchase it.

Inspections

Once you’ve determined that the deed for a property is in the clear, it’s time to hire a home inspector.

A home inspector will check the property for the presence of foundation damage, water damage, fire damage, mold, asbestos, and a variety of other issues that can be very expensive to fix.

If any of these issues exist, you may be able to negotiate a lower price with the seller for the property.

In many cases, sellers will provide a discount for a property if the buyer can prove that expensive repairs will be needed to make it habitable.

Check the Markets

After you’ve completed these two steps, it’s time to check the local markets. As a rule of thumb, it’s a good idea to check rental prices for as many properties as possible in the surrounding area.

In many cases, the rental prices of nearby properties can serve as a guide for determining how much you’ll be able to earn.

Costs

Finally, it’s important to make sure that you have analyzed the total costs and profits associated with a investment property.

There are many fixed costs that you’ll have to pay as a landlord. These include property taxes, a mortgage, landscaping, exterior repairs, and interior repairs not caused by intentional damage. In some cases, the costs associated with a property can offset the earnings from rent.

Consider making a spreadsheet with all the costs in one column and rent in the other. If costs are more than 75 percent of rent, it may be a good idea to look elsewhere.

By following the simple tips and tricks in this guide, you’ll be on the path to earning rental income in no time.

Tags: investment property, Rental Property

Category: Investing