Things to Consider When Buying Investment Property

Posted by Techyscouts | Posted on 02/16/2018
  •  Real Estate
  • One of the downsides of the current housing market is that there are too many buyers, yet not enough homes to accommodate these prospective homeowners. While this may be detrimental to them, it’s a massive boon to those who are interested in purchasing investment property. As South Bay investment property is so richly desired, a person can end up making a decent chunk of money from his or her purchase. There are multiple options that you can take with an investment property to make money. You may want to rent it out and make steady income from it or you may want to fix the house up and then flip it for a decent profit. Whatever your plan is for it, your Los Angeles real estate broker, Mike Millea, wants you to consider these important tips when you’re going to buy investment property.

    Make a Big Down Payment

    You won’t be able to get mortgage insurance for investment properties so you’ll need to make a down payment that’s at least 20 percent in order to get traditional financing. There’s no harm in putting down more money as it’ll give you an even better rate.

    Know How You’ll Fix Things

    With your investment property, you’ll essentially have to act as the landlord. This means that you’ll need to be prepared to make any necessary repairs or at least know who to call if anything goes wrong. Make sure that you have the money for these repairs – especially if you haven’t received your regular rent checks yet.

    Plan to Have Extra Money on Hand

    Not only should you have money on hand for regular repairs, but you should also have extra money in case you’re having a hard time selling the place or finding a new tenant. You may find that a tenant leaves without much notice, cutting off your cash flow. While you’re searching for a new tenant, your bills won’t suddenly stop coming – you’ll need to be prepared and have the money available to take care of them.

    Start out Smaller

    If you’re not already experienced with buying investment property, you shouldn’t bite off more than you can chew. We recommend starting off small (with something like an apartment, a condo, or a duplex) and avoiding any major fixer-upper projects until you’ve amassed plenty of experience. Starting small will introduce you to investment property and help you determine if it’s for you.

    Think About an REIT

    We understand that while buying and managing investment property can be very profitable, it’s also a strenuous task that’ll require quite a bit of your time and effort. However, there may be a great solution for you – real estate investment trusts (REIT). REITs are companies that use investors’ money to buy and lease real estate. They’re simple to purchase and they’ll provide most of the same benefits of actually owning South Bay investment property.

    Contact Your Los Angeles Real Estate Broker Today!

    If you’re interested in investment property or you simply have any questions, we encourage you to get in touch with your real estate broker, Mike Millea. To do so, feel free to give our team a call at (310) 939-9356 or contact us through our website. We hope to hear from you soon!

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