Investment rental properties are one of the places you can put your money and rest assured that you will get returns for the rest of your life. Many Americans today do not have a retirement plan, and life can be tough after retirement. Having a rental property means that you have a plan for your old life and that of your children. Rental properties also come as leverage when you want a loan from the bank, and in addition, cash flows are reassured in the long run.
The following are tips for buying first investment rental property.
Save for the down payment.
In most cases, first-time buyers have to get a mortgage to help them purchase their first investment rental property. The first requirement to qualify for a mortgage is paying the down payment. You need to save around 20 to 30 % of the value of the rental property as a down payment.
Pay off all your debts.
In order to have an excellent credit score that will allow you to get a mortgage loan, you need to pay off some of your debts. Before you begin the journey of looking for an investment property, make sure that your credit score is great, because it will go a long way in determining whether you fill to get the mortgage financing or not and the interest rate.
Find the right location.
Location is vital when looking for an investment rental property, the last thing you would want is being stuck with a rental property in a location in decline, the crime levels are high, and the population is going down. While looking for a property, go for an area that is on the rise, where there are great schools, cost of houses is going up, and there are many social amenities that will attract tenants.
Beware of high interests.
Interest rates on loans keep on changing, so make sure that the interest rates will not hurt your monthly profits from the investments. While looking for a way to fiancé the investment, go for mortgages with low-interest rates.
Invest in a low-cost property.
Investing in a high-cost property means that the monthly expenses will be high, and that will reduce your profits. However, investing in a low-cost property, in a neighborhood that is rising will guarantee high profits, because the expenses will be lower.
In a nutshell.
Investing in the right property, in the right location, and doing the financing properly means that you will be guaranteed a lifetime of monthly income; however, you need the help from professional realtors who know the best areas to invest. It is not advisable to start the process of buying a rental property without consulting professional realtors.