5 rental property tips for your first purchase

5 rental property tips for your first purchase

Five rental property tips for your first purchase. Number one, are you cut out to be a landlord? Do you know your way around a toolbox? Hi, I’m Rich Barnes, owner, broker of Realty Experts in West Dallas, Wisconsin, 53214. How are you at repairing dry wall or unclogging toilets? Sure, you could call someone to do it for you, or you could hire a property manager, but that will eat into your profits. Property owners who have more than one or two homes often do their repairs to save money. If you’re not a handy type and you don’t have lots of spare cash, being a landlord might not be right for you. Number two, pay down your personal debt. Savvy investors might carry debt as part of their portfolio investment strategy, but the average person should avoid it. If you have student loans, unpaid medical bills or children who might be attending college soon, then purchasing a rental property may not be the right move. Number three, secure a down payment. Investment properties generally require a larger down payment than do owner occupied properties. They have more stringent approval requirements. You need at least 20% down payment given that mortgage insurance isn’t available on rental properties. You may be able to obtain a down payment through bank financing, such as a personal loan. Number four, find the right location. The last thing you want to do is to be stuck with a rental property in an area that’s declining rather than is stable or picking up steam. A city or a locale where the population is growing, a revitalization plan is underway, represents a potential investment opportunity. Number five, should you buy or finance? Is it better to buy with cash or to finance your investment property? That depends on your investment goals. Paying cash can help generate positive monthly cash flow immediately. Financing means less out of your pocket. If you would like to see more videos on investment properties, click the link below, and you’ll be directed to my YouTube page, and as always, feel free to reach out, I’m here to help. Thanks, and you have a great day.

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