BUYING AN INVESTMENT PROPERTY
Buying an investment property is a good way to prepare for your financial future. It provides a flow of cash in addition to other income through rental opportunities, and can even present certain tax advantages. That being said, it is a decision that should not be made lightly. Investment property also brings additional responsibility and you should be prepared to handle maintenance and repairs. Some investment property may also need renovating, which can dip into your budget and there may be times when the property is vacant between rental agreements.
What Is An Investment Property?
Any residential property can be considered an investment property if you have no intention of making it a primary residence.
You may want to purchase a home near your primary residence and rent it on a long term basis to a couple or a family. If you live in an area that experiences a lot of tourism, such as a lake, beach, or a near a ski resort, then short-term vacation rental properties may be the better choice for you. These are residences that are rented for a month or during an entire season and can be quite profitable.
Reasons To Consider Investing In Real Estate
Return on investment (ROI)
Real estate investing is one of the most stable forms of investing and generally is guaranteed to produce a return on your investment. For example, if you purchase a residence and use it as a rental property for several years and then sell it for more than you purchased it at, you have already made a positive ROI.
Cash flow
The rental market is experiencing exponential growth and this means that you have greater opportunities for cash flow. Investment property mortgage rates are incredibly low which means that you can use the rental payments to pay for the rental property’s maintenance and still make a profit to put into the bank.
Easier on your taxes
Buying an investment property can actually help you out with your taxes each year because you are using it as a business. This means that any expenses associated with that property are tax deductible: repairs, maintenance, mortgage interest rate, and depreciation.
Things You Should Know When Buying an Investment Property
In order to get the most out of your investment property, here are some factors that you should examine before you decide that investing in real estate is the right choice for you.
Mortgage payments
Examine your financial situation to make sure that you will be able to cover mortgage payments on the property during those periods of time when it is vacant. Choosing the right type of home loan options will also help.
Condition Of The Home
Evaluate the condition of the property and options available such as renovating it yourself, hiring a professional to do the job, or focusing on just the interior or exterior of the property.
Location, Location, Location
Consider who your target renter will be and look for properties that match what they would look for when choosing a place to live. If you are targeting college students, then looking for a property within close vicinity to a university is paramount. In addition, you may also want to consider how close the property is to public transportation, grocery or convenience stores, local nightlife and other amenities that college students use often. Finding a property with a convenient location could mean the difference between renting for a premium price or bottom dollar, as well as how often you can keep it occupied.
How can we help you?
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You can reach me, Travis Newton, Homes for Heroes Mortgage Lender Affiliate in Salem Oregon at 503.931.4490 or on the Oregon Homes For Heroes Facebook page.
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