When you think about investing, there is a good chance that buying and selling stocks is the first thing that comes to your mind. Generally speaking, that is what investing means to most people.
But you can also invest your money by purchasing real estate. There are actually a whole bunch of reasons to invest in real estate rather than stocks whenever possible.
Would you like to take advantage of these reasons by purchasing your very first investment property? If so, there are a few things that you’ll want to remember when doing it.
Take a look at eight helpful tips on how to buy a rental property investment for the first time.
1. Begin by Making Sure You’re Ready to Own an Investment Property
When you invest money by buying and selling stocks, there is obviously some work that goes into it. But it’s not going to be something that you’ll need to spend every waking minute worrying about.
The same can’t be said for investing money by purchasing an investment property. You’re going to have to work to maintain and repair an investment property pretty much all the time to ensure it holds its value.
Are you cut out for this? If not, you’ll want to skip over purchasing your first investment property and invest your money into something else.
2. Decide What Kind of Investment Property You’re Going to Buy
If you decide that you are, in fact, ready to buy and own an investment property, you can start working your way through the process so that you’re able to do it. But prior to doing this, you should figure out what kind of investment property you want to buy.
Do you want to buy:
- A small condo that you can rent out to a single person?
- A large house that you can rent out to an entire family?
- Something in between?
When you visit memphisinvestmentproperties.net, you’ll see that there are so many types of investment properties to choose from. You need to look for an investment property for sale that matches what you have in mind.
3. Look Around for the Best Area to Buy an Investment Property
You know the age-old saying, “Location, location, location,” right? Well, if you don’t, it’s time to commit it to memory! You’re going to want to keep it in mind any time you’re purchasing an investment property.
Ideally, you want to buy an investment property located in an up-and-coming part of town. It’ll allow you to attract lots of interested renters, and it’ll also increase the value of your investment property quite a bit over time.
4. Come Up With a Budget for an Investment Property
Are you going to spend $50,000 on an investment property? Or is $1 million more your speed?
You can find investment properties that fall into either of these categories. It’s why it’ll be so important for you to come up with a budget for yourself prior to picking out the investment property that you want.
You’re going to struggle to narrow down your options if you’re looking at investment properties that fall into a wide price range. You should hone in on one specific price range to give yourself a chance to buy something you know you can afford.
5. Figure Out How You’ll Pay for an Investment Property
Speaking of being able to afford an investment property, you’re going to have to come up with the funds for it at some point. So you need to know how you’ll plan to pay for it when the time comes.
Are you going to take a bunch of money out of your savings account and buy an investment property with it? Or are you going to finance an investment property with one of the many investment property loans and pay it off over time while keeping some of your rental income for yourself each month?
That’s going to be something that you’ll have to decide when you’re interested in purchasing your first investment property.
6. Shop Around for an Investment Property That Shows Plenty of Potential
When you’re shopping for an investment property, you should get into the habit of asking yourself, “Is this a property that I would want to rent?” You need something that’s going to have people banging down your front door trying to rent your investment property from you.
This means that a rental property investment should have a long list of features that make it attractive to renters. You want it to have all the potential in the world so you don’t have any issues keeping it occupied.
7. Crunch the Numbers to See How Much an Investment Property Could Help You Make
No matter what your budget for an investment property is or what type of rental property investment you’re going to buy, you should always keep an investment property calculator handy. It’s going to tell you how much you’ll be able to make off a property each and every month.
You’ll want to educate yourself about the so-called 1% rule. It’ll shed some light on which investment properties will be worth your time and money.
8. Protect an Investment Property by Picking Up a Landlord Insurance Policy for It
Once you have an investment property in your possession, you’re going to need to do everything in your power to protect it. That will include purchasing a landlord insurance policy for it.
This policy should protect you from any property damage that is done to your rental. It should also account for things like lost rental income.
Buy Your First Investment Property Today by Putting These Tips to Good Use
Purchasing your first investment property can be an intimidating experience. You’re going to feel like you’re making different mistakes at every turn.
Make no mistake about it: You will likely make a misstep (or two!). But as long as you put the tips that you’ve found here to good use, you should be able to steer clear of any serious trouble. It won’t be long before you’re the proud owner of your own investment property and making money off it every month.
Get more useful tips on investing by reading the other great articles found on our blog.