Investment properties can be a terrific way to make some extra income and this market is ripe with investment opportunities; the sellers are motivated, the loans are available and interest rates are flexible. But before you start looking for a property, there are some things you should consider.
Pick your property. First, determine what kind of investment property you’re interested in. Do you want to be a landlord? Do you want to buy and flip a house? Are you interested in commercial or residential property? Houses or apartments? Right now is a great time to find foreclosed properties. Spend time thinking about what type of property is right for you.
Know the market. Before you begin searching, learn the ins and outs of your local market. Study what prices look like in your area, and consider working with an experienced agent who is familiar with your location. Find a reliable agent or broker to work with; a good team can advise you through every step of the process. It’s also smart to talk to those who already have experience with investment properties.
Talk to your lender. You should always talk to your lender before you start searching. It’s important to know what you can afford and what the interest rate is going to be. Meet with a couple of different lenders to see who can get you the best deal.
Consider hidden costs. You may plan on renting out the property, but don’t forget about things like maintenance costs, taxes, tenant turnover costs and vacancy periods. A lot of buyers planning on renting out their investment property don’t factor in tenant turnover costs. These costs accrue from things like advertising for a new tenant and spending time finding and showing, cleaning, repainting, replacing carpet, and more. And don’t forget taxes. Every property you’ll own will have both property and income taxes you’ll have to pay, so it’s important to know your costs and your estimated income.
Are you interested in a Management Company? If you want to invest in a rental, but don’t want to take care of the property yourself, you can consider a Management Company. These companies usually take 6 percent of the total rent in exchange for dealing with paperwork, maintenance, legal issues, any possible evictions and a myriad of other problems that may arise. As being a property manager can be extremely time consuming, many investment property owners choose to go with Management Companies. This is something you should decide before purchasing.
Consider all aspects of investing before committing. Right now, more and more Americans are turning to rental properties, so purchasing a property you plan on renting may be smart for you.
For more information on investment properties, please contact RE/MAX of Boulder, Inc. at 303-449-7000, OR 1-800-825-7000.
RE/MAX of Boulder, Inc. located on the corner of Canyon and Folsom, is nationally and locally recognized as one of the most successful real estate offices in the industry. Nationally, they are one of the "Top 500 Power Brokers in the United States" as listed in National Real Estate & Relocation magazine. Real Trends ranked them #1 in the Nation for Closed Sales Volume for 2010. Regionally, for the 4th year in a row, the company has been named the #1 RE/MAX office in America for Single Office Closed Volume. They can be reached at 303.449.7000 or visit http://www.BoulderCO.com. Connect with them on Facebook and Twitter, search remaxofboulder. Subscribe to their YouTube channel and see videos of all their homes for sale at http://youtube.com/remaxofboulder