Top 5 Tips For Purchasing Your First Investment Property!
Purchasing an investment property can be part of your short term or long term financial plan. You could do a flip, or rent it out and hold on until your mortgage is paid off. There are also many in between scenarios. Either way, buying an investment property involves a considerable amount of capital investment which you want to WORK for you. Spend money to make money, right?
I recently bought my first investment property. I’ve named her #GWEN. I had been waiting a long time for the perfect house. Diamond in the rough. Something that I could afford, and checked off all my boxes. Something with potential and wouldn’t cost me an arm and a leg to renovate. Most importantly, something I knew would make me money and help build my nest egg.
If you are thinking of buying your first investment property, are the top 5 things to consider:
1. Consult your mortgage broker. This is very important! Your broker will walk you through important financial considerations and tell you how much you need to put down.
2. Work with your Realtor. Together, knowing your budget, you can come up with a plan that will help you find the right property, and get into to see it before it sells! And likely, if its an awesome opportunity, other buyers will want it too. You need someone who can strategize how YOU will get the house, not someone else! Lucky for me, I told myself what I would tell any client. And boom, it worked!
3. Consider more than just the house – look around the area. What kind of street is it? What is it close to, or what is being built? For example, my property is across the street from a school bus pick up stop. How perfect would this be for a young family renting my property, or for a potential family buying it? Neighbourhood optics are VERY important. The nicer the neighbourhood, the better chance your property will perform well, whether you decide to rent it or flip it.
4. Pick a house with good bones. You can make cosmetic improvements; you cannot reinvent the house (well, not within a reasonable budget). Again, the key is for your investment to make you money, not cost you money. For me, this was especially important. I’m not a professional investor, and every dollar is important. Look for things like a functional layout, bedrooms where they should be, entrances and exits, heat source (ie gas vs electric), brick vs vinyl, and whether it has a garage. I work with a LOT of buyers, and I’m telling you, a garage is important! It adds value!
5. GO FOR IT! You’ll know it’s the right house when you see it. It’s like there’s 7 stages. Pure excitement, then nerves kick in, then you want to shout your achievement out to the world, and then crawl in a hole and hide!! In the end, all the reasons why you jumped in will come flooding back, and you’ll be thankful you decided to go for it.
Written by: Deanna Hutton (firstname.lastname@example.org)