Info about Real Estate
Tips For Buying Investment Property
The real estate market has been through some turmoil lately, but now is a great time to buy investment property because prices for real estate have dropped significantly. Buying investment properties is a great long term strategy for retirement too. When you are ready to retire, the income from your investment properties will provide more financial security.
To find a good deal when buying an investment property, it is important to do research on the real estate market in your area. It is usually easier to know what things are worth locally. An effective way to find property is to drive around your city and look for for-sale-by-owner signs. The newspaper, real estate flyers, and the internet are also great places to look. By the averaging the price per square foot for these homes, you will know what it will cost to buy investment properties in your area. Then you will be able to spot a deal when you see one.
If you want to retire somewhere other than where you live now, you can go ahead and buy investment properties in that area. In Florida, a popular retirement state, property price are at a 20 year low. For example, the average condo price in Miami, Florida is $124,000. When you want to buy investment property in an area far from where you live, the internet is a great research tool. There are many sites out there that can help you get an idea of the cost of properties in those areas. Once you pick a city or neighborhood, call Real Estate agents in the area and get more information about the properties that are available. It is also wise to ask an agent about the cost of rent in the area and how easy (or hard) it is to keep properties rented.
Before buying investment properties, a prudent investor will consider all of the costs. Mortgage companies are stricter regarding investment properties and will probably require a significant down (25-30%). Additional costs over the mortgage payment will be annual fees like tax and insurance as well as maintenance. In the long term, houses can need more expensive repairs, such as roof replacement. Ideally, the rent you can charge for the property will cover the mortgage and maintenance, but, if it does not, decide how much you will be able to pay for it every month on your current income.
After buying an investment property, keeping the property rented and in good shape will require quite a bit of work. If being a landlord does not appeal, there are property management companies who can maintain your rental for you. They will charge you a percentage of your monthly rent to take care of the day-to-day issues of rental properties, usually around 10% a month. These companies can save you a lot of hassle, but you loose a bit of the your income.
Buying investment property is a smart financial decision. If you do your homework before buying, you can hope to gain between 50 to 100% on your investment.