Owning an investment property can be a wise investment that not only lets you grow your asset wealth over time, but also can provide you with positive cash flow today. However, property investment isn’t as easy as buying a property and waiting for the cash to start rolling in. It is important to choose your property wisely, and to employ a well-researched strategy. The deal is in the buy.
Here are some tips on how to choose a suitable and potentially profitable property for investment.
Do you have a Financial Buffer?
In addition to having the necessary down payment on hand to purchase a rental property, is the rental property in need repairs or renovations before it is rentable? Do you have the money to accomplish these jobs and pay the mortgage before you’ve got it rented out?
In addition to the 20% down payment needed for a conventional mortgage, don’t forget to also account for closing costs (about 2% of purchase price) when you are setting your house hunting budget....