Buying an investment property can be quite the tricky affair; considering how volatile the market can be at times. This spells doom especially for first-time investors; particularly the ones that had invested their life-time savings into the said properties.
Moreover, the persistent shortage of prime properties in the market has resulted in intense bidding wars that not only require grit, but also ruthlessness when it comes to getting the best deal to invest that money in.
That being said, here are some great tips to keep in mind when it comes to negotiating on prime investment property.
Ensure to Plan for a Massive Down Payment
Since mortgage insurance is unavailable when it comes to investment properties, it would be wise to always perform a 20 percent down payment as is usually the norm of traditional financing. Moreover, putting up a greater amount as down payment can result in much better rates because loan costs for investment properties tend to be much higher than normal ones.
Always Be on Deck to Fix Different Facets of the Property
Becoming a landlord also comes with a myriad of challenges and problems; relating especially to repairs. That being said, one should have ample savings to handle different aspects of the property such as unexpected repairs that might have been left unattended in the short term; especially before the rent starts to roll in.
Handling the Property Taxes
According to the type of rental property that has been bought and the duration that it is being kept for, investors could find that they have a massive increase in their property taxes. This is certainly something that the new property owner should be on the lookout for.
Be on the Lookout for Fixer-Uppers as Well
If one happens to be a novice when it comes to investing in real estate, then they should not proceed to take on a bigger challenge than they are able to handle at the moment.
Unless one happens to have a God-given ability to perform large-scale improvements at ease, then be on the lookout for people who put up absurd prices that frankly, require an extreme makeover to rehabilitate.
As a rule of thumb, always begin with something that is easy to handle. For example, buying smaller property is much easier to rehabilitate as compared to buying massive property. Hence, it would be wise to start with an apartment, a condo, or even a duplex if it’s stretching it.
That being said, for more information on investment properties, have a look at Housingpredictor.com.
Choose the Investors that You Will Partner with Wisely
If by chance one doesn’t have the financial power to purchase property as a singular entity, then partnering up can be a great idea. Just ensure that the said partner is one that is an asset to work with, rather than a liability.
Conclusively, buying investment property is a sound step towards financial bliss, and the rewards can be quite enjoyable if the investment is effectively planned for. So giving investment property a shot is one essential way of putting to good use any excess income one might have.
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