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6 steps to buy an investment property

01. Decide on a price point – A good rule of thumb is to use the 1% rule. For example if you purchase a home for $100,000, you’ll need a minimum monthly rent of $1,000. $200,000 must rent for $2,000 and so on.

02. Pick a location(s) – Plenty of things to consider here. Airbnb guests aren’t worried about the school district and long term renters may not need walkability 24/7. Decide which way you’d like to go and pick a location that way.

03. Determine rentability – What are your target renters looking for? Long term renters may say creature comforts like 2-3 bedrooms, washer/dryer, dishwasher, storage. Short term renters usually want to be close to(or far from) the action.

Don’t wait to buy real estate, buy real estate and wait.

T. Harv Eker

04. Purchase the Property – This process will be similar to purchasing your primary residence. Your lender may require a higher down payment and loan requirements may be a bit different, but the steps are the same here. Offer, escrow, closing, rent!

05. After Closing – You may want to consider hiring a property manager to take care of renting and maintaining your income property. These will typically run you 15-25%.  Keeping this in the hands of professionals will keep those gray hairs at bay a little longer.

06. Offset Additional Mortgage – For an investment property you will need 20% down but the great thing is that you can include rent as part of your income, so this will offset the additional mortgage.

Interested in starting your home buying process? Click here to set up a one on one consultation with a S&C agent! Just getting your feet wet? Click here to see what’s on the market in your area!

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