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(This article was written and submitted by Katie Conroy of the website, advicemine.com.)
Are you thinking of purchasing an investment property? Buying a real estate asset could potentially be one of the most lucrative decisions you make; however, it could also be one of your biggest financial mistakes if you purchase the wrong property. This article covers some basic things you need to know about property investment, including how to pick the right location, what options you have when it comes to paying, and how to prepare the house for the new tenants.
Find a Real Estate Agent
When looking for an investment property, the first thing to do is to find a realtor you can trust and who can help you navigate the complicated and fast-paced purchasing process. Perhaps it would help if you think it like this: working with a real estate agent is like hiring an employee. This professional will work on your behalf to find properties, arrange visits, and negotiate prices; thus, you’ll want to find someone with an impeccable reputation, excellent skills, and an eye for detail. If you’re looking for investment properties in Virginia, Christopher Garguilo can guide you through the hunting and buying process, making things easier for you.
Pick the Right Location
When you purchase an investment property, you need to know that location is everything. This is especially true if you plan on selling the place later on; however, if you’re looking to rent your investment property, the best pick would be a place that has year-round tourism. For instance, look for properties in ski towns, summer retreat zones, and areas close to popular attractions. An investment property doesn’t just have to cater to tourists and vacationers, though. For example, suppose you can accurately estimate the rent for the place you’re interested in. In that case, you can calculate whether it would be a lucrative investment: a basic rule used by numerous investors is that you should aim to get at least one percent of your purchase price in monthly profits.
Obtain the Funds
Depending on where you buy your investment property from (e.g., auction, through an agency, etc.), you should arrange to pay either cash or by taking on a mortgage. For instance, you may have to pay in cash if you buy the house at an auction during foreclosure or a short sale. On the other hand, if you choose to get a home loan, the most common approach is to apply for a conventional mortgage. However, keep in mind that the federal government does not insure this loan type; private lenders support it, which means it’s best to buy homeowners insurance to secure the funds.
Close the Deal
Once you have the funds, you need to hire a professional to get on with the inspection and appraisal process and then bring the negotiations to an end. Closing can end up being expensive, so it’s best to prepare yourself for additional costs like title insurance, local fees, and so on.
Prepare the House
After you get the house in your name, you’ll enter the preparation phase when you analyze the property thoroughly and upgrade it to make it appealing to potential tenants. However, don’t go overboard with the renovations because renters will probably not care about whether a wall makes the living room look smaller or whether the lighting fixture isn’t bright enough. Some improvements you can make include repainting the walls, refreshing the furniture, adding some LEDs in the backyard, or putting up a fence for more privacy.
For projects like the latter, consider hiring local contractors as they are likely aware of the regulations and utility lines in the area. With a simple ‘local fencing companies near me‘ online search, you can find plenty of professionals who can help you make the property more appealing. Before proceeding with the hiring, keep in mind to browse the company’s website to get a quote, check its reviews and licenses. Overall, expect the fencing to cost $4,500 – more or less – but keep in mind that the final price will depend on what materials you want to use for the fence, its size, and where you want it.
An investment property is an intelligent way to make some extra money and even achieve financial independence. However, if you’re doing this for the first time, you need to look up as many resources as possible and ask as many professionals as you can about what the investment requires so you don’t waste your money.
If you’re looking for a place to buy in Virginia, consider working with Christopher Garguilo. He is a skilled real estate agent who can help you navigate the process efficiently and find the best property for you. Call or text Christopher anytime at 757-876-7443 or browse the website for more information.