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3 Tips for First-Time Investment Property Buyers

3 TIPS FOR FIRST-TIME INVESTMENT PROPERTY BUYERS 18 percent of occupied homes in 2012 were rentals, according to a USA Today analysis Census data. The most difficult part about buying your first investment property will be lack of experience. Keep these things in mind to make the process as smooth as possible. FOR SALE TIP 1 OWNER-OCCUPANT OPTION The first investment property a young buyer purchases will likely be the first home he or she buys, period. Consider living in your first investment property for a year before renting it out. REO, or real estate owned, properties are the best source for great deals. Wells Fargo, Fannie Mae and Freddie Mac, give priority to buyers who will occupy the property immediately. REO homes were foreclosed on, but then failed to sell at auction. Banks are not property managers, so they try their best to get rid of REO properties as quickly as possible. Federal programs like HUD and the VA also allow you to make a smaller down payment on properties you indicate will be owner- occupied. Once you've put your 12 months in, rent the home out and start seeking your second investment property. TIP 2 SELF-MANAGEMENT VS. PROFESSIONAL MANAGER REALESTATE.COM ESTIMATES THAT A TYPICAL OUTSIDE PROPERTY MANAGER COSTS UP TO 10% FOR RENT OF MONTHLY RENTAL REVENUES Self-management will theoretically save you money, but could prove disastrous if you don't consider yourself a handyman. Some investors have no choice but to hire an outside manager-maybe they reside in a different city or don't know anything about home repairs and maintenance. Regardless, once you rent the home, you become the landlord. TIP 3 SIMPLE ECONOMICS The obvious goal of all property managers is to make money. To turn a profit, the initial investment property must either be paid for in cash or with a substantial down payment. Do a financial inventory to discover where you can come up with the funds to buy a house outright. You could potentially sell your future annuity payments to a third-party company for a lump sum of cash. 24 Consider cashing out a 401(k) and bet on your property management skills over the stock market for your retirement. Those who aren't too proud can even move back with their parents for a year and save toward a large down payment. Property management is not a get-rich-quick scheme. But it can be a lucrative enterprise if done correctly. The key is to have patience and not overreact when/if issues arise. www.SELLINGWARNERROBINS.COM ©Anita Clark Realtor ® Source:

3 Tips for First-Time Investment Property Buyers

shared by anitaclark on Mar 28
Market conditions are currently ripe for first-time investors to enter the rental industry. The most difficult part about buying your first investment property will be lack of experience. Keep these t...


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