Buying an Investment Property

With people having more equity in their homes, they are using this to build their financial portfolio by buying investment properties.  There are many many questions around this topic, but here are the top 3 questions I am asked when people are considering buying an investment property

The first question is “How much do you need to put down?”

If you are buying a property purely as an investment, you need to put at least 20% towards a down payment.  If you don’t have that much saved up, what some of my clients do is keep their primary residence and turn that into a rental and then buy their next home to live in. 

The second question is “How do I know what rent to charge?”

Unlike purchase properties, there isn’t an MLS or Public record of what rents go for.  What I recommend is to talk to a property manager, or there are websites out there like Rentometer or Zillow who will give you a range of rents in that area.  Sometimes its a case of supply and demand and you simply throw a number out there (within a range of course) and see if the market reacts to it. 

The third question is “Do I manage the property myself or have a property manager do it”

It really depends on your comfort level. A property manager is a professional company that will take away a lot of the headaches for you.  Of course there is a fee associated with that.  I have some suggestions around this subject so call me and I will offer some advice on this.  

Buying an investment property has certainly been a great way to build wealth.  So please reach out to us if you are curious about buying one.