Invest In Property Close To Your Home

Category: Finance, Real Estate.

Purchasing rental property is a popular real estate investment plan these days.

However, before you dive into an investment, there are several things to consider. Rental property can pay dividends in the long run to its owner and while being a landlord has its challenges, it is still a great way to be a successful investor. The following are a few tips to think about when purchasing rental property. Before you purchase a rental property, or any piece of real estate for that matter, visit the location and personally inspect the home. Do Your Own Walk- thru. It is imperative that you inspect the home as if you were going to live in it yourself. It might even be a good idea to hire a home inspector who can give his or her professional opinion on the state of the house.

Make a list of any concerns you have with the property and bring them up to your real estate agent. Double Check Utility Costs. It only makes sense that a potential landlord would do the same. All savvy renters confirm recent utility expenses before renting property. Contact the local utility offices to verify utility expenses. If a home has exceptionally high heating bills in the winter, it might be harder to rent or it may require repairs to the home. You should check out gas, water, power, and waste costs when applicable.

Also, at this time you will want to consider whether or not you will include utilities as part of the rent when you lease out the home. Buy Local. These are all things to consider before buying the home. As a landlord, especially if you are just starting out, you don t want a bunch of rental properties situated apart from each other. Invest in property close to your home. If you plan on managing your own rentals this is even more important. A good rule of thumb is to purchase homes no more than an hour drive from yours.

If your investment property is an hour away, that puts you out two hours before you have even addressed your renter s primary concern. If a tenant calls with a problem and needs your assistance, you don t want to drive a great distance to get there. Check Out the Neighbors. You do not want investment property that is bordered by a cluttered yard or a noisy family. If you are buying property in a subdivision or neighborhood, check out who will neighbor your new investment. If there are cars sitting in the front yard, you might want to think twice about dropping your hard earned money into that particular piece of land.

If your potential investment is located within a Home Owners Association, inquire about the organization s rules and regulations. Check Out the HOA. While HOA s can benefit investors by serving as a watch- dog over rental property, they can also become a pain if they are heavy handed with their members. An overzealous HOA could mean more trouble then you want to deal with. Some HOAs have been known for having rules stricter then the city they are located in.

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Loan- To- Value( LTV) Ratio - Lilian Rushin about Finance and Real Estate:

Traditionally, people put 20% of the purchase price as a down payment when buying a home.