Are you interested in buying your first investment property? Real estate investments have produced some of the world’s wealthiest people, which means there are more than a few reasons to believe this is a smart investment.
Most experts agree, though, as with any investment, you need to research options and learn as much as possible before diving in with hundreds of thousands of dollars. Keep reading to learn some top tips before investing in Suffolk real estate.
Would You be a Good Landlord?
Do you know how to fix common household issues? Can you unclog toilets and repair drywall? While you can hire someone to do this for you or hire a property manager, this will take away from your profits. If you own one or two properties, handling repairs on your own is a must.
However, all this changes when you add more properties to your portfolio. With multiple properties, you should consider bringing in the professionals. They can help with the process. However, as a new investor, starting out by spending your profits on handymen may not be the best way to earn a profit.
Pay Down Your Personal Debt
A savvy investor will likely carry debt as part of its investment strategy. However, an average person should avoid this. If you are dealing with unpaid medical bills, student loans, or children who are going to college soon, buying a rental property may not be the best move.
Being cautious is important. You do not have to pay down your debt if the return from your real estate is more than the cost of your debt. This is something you must figure out.
Secure Your Down Payment
Usually, investment properties require a bigger down payment than other owner-occupied properties – they have more stringent approval requirements. The three percent you have to put down on the home where you live now will not work for your investment property. You require a down payment of at least 20% since mortgage insurance is not available for rental properties. You may be able to get the down payment from bank financing, like a personal loan.
As you begin investing in property, be sure to keep the information here in mind. Doing so will help ensure that you get the results desired and that the investment you make is a smart one. Being informed is the best way to ensure the investment is successful.