Your First Income Property
Before you invest in your first income property, it’s imperative that you know what you’re getting into. The last thing you want to do is bite off more than you can chew.
In this article, you’ll find a few points to consider before taking the leap and purchasing rental property.
Is landlord life the life for you
Before you invest in your first income property, it’s imperative that you know what you’re getting into. The last thing you want to do is bite off more than you can chew.
In this article, you’ll find a few points to consider before taking the leap and purchasing rental property.
Location, location, location
You want to invest in a rental property located in an area that is on its way up, not down. As you’re hunting, look for an area with low property taxes, a good school district, and amenities like restaurants, coffee shops, retail stores, bike trails, and parks. You’ll also want to seek out neighborhoods with a low crime rate and easy access to public transportation
Buying vs Financing
Whether you choose to buy or finance your rental property depends on your personal investing goals. If you pay cash, this can help with your monthly cash flow, but if you finance, you may see a greater return in the long run.
ROI & Interest Rates
The interest rate on an income property is typically higher than the interest rate on a traditional mortgage. If you choose to finance, make sure to secure a low mortgage payment that won’t dig into your monthly profits.
Get landlord insurance
Landlord insurance is how you can protect your investment. It covers property damage, lost rental income, and liability protection.
Don’t be tempted by a fixer-upper
You may think that you can get a bargain with a rundown house that needs a lot of work – but as your first property, a fixer-upper is not the best idea. You will probably end up paying too much to renovate. Instead, look for a home that needs minor repairs that is below the market average – a good rule of thumb is to never buy the worst house on the block, but don’t buy the best one either.
Understand the legal Aspects
Before investing in an income property, get familiar with your rights as a landlord and your tenants’ rights as well
Your First Income Property
Purchasing an income property is about playing the long game. You won’t see astronomical returns right away, but if you follow these tips and are a trustworthy, dependable landlord, you can make a good living off of your rental property.
