Buying your first investment property? Keep these in mind
Buying an investment property is a great way to circulate your money, especially in areas like Smith Mountain Lake. As you begin your foray into real estate investment, keep these six tips in mind.
- Make plans
Buying real estate can be an emotional experience. Rushing into a decision could mean spending more money than you planned and forcing yourself to shift gears. This is counterproductive, as with investment properties, the main goal is usually to generate income.
Keep a level head and make plans before you shop for an investment property. Are you keeping it and let it appreciate, then sell? Or are you turning it into a vacation rental? For the latter, it would help to identify your target market as early as possible. Most importantly, create a budget and hold yourself to it. It can act as a buffer that will keep your decision-making in check.
- Find out what’s already in the neighborhood
As with real estate investments, location is everything. Before you invest in the property, take time to get to know the neighborhood.
What’s in the area? Is it already developed or up-and-coming? How close is it to facilities, amenities, and local attractions? Is the location aligned with your plans for the property? For instance, if you want a secluded retreat, investing in a property far from all the hubbub would be best. If the area is already saturated, consider changing how you market the property or pick a different location entirely.
- Take a friend with you
Even if you don’t want a partner for the investment property itself, involving a friend in the buying process is one of the easiest ways you can keep yourself on track.
Before you begin your search, tell your buddy exactly what you’re looking for in great detail. Go over every property that catches your eye with them to make sure everything hits each point on your checklist.
- Hire a local realtor
Your workload is halved when you work with a local realtor. He or she will help you throughout the entire buying process, such as planning out your investment and shopping for the best loan. Having a good working relationship with your realtor also helps take some of the pressure off of the buying process.
- Consider hiring a property manager
There are two types of property investing: passive and active. Regardless of which one you choose, it will require dedication and time to be a successful venture. Because of this, it’s difficult to balance property investments with a full-time job.
As you make plans, consider hiring a professional to manage your investment property. This will help, especially if you choose to be a passive investor.
- Study your loan options carefully
In the rush to secure your dream property, don’t overlook the loan options available to you. More offers from lenders mean different payment terms and time frames, so carefully read the fine print and make sure you understand what you’re getting locked into. Your real estate agent can also help you discover loan options that may not be apparent to you.