Things to Consider When Buying Investment Property
Do you want to invest in high returns properties? If so, you need to do your research well. Whether you are a first-time or seasoned investor, buying real estate can be a daunting task. The volatile nature of real estate market can leave you with huge losses. To be on the safe side, consider the following when looking for an income property.
Select the Best Property for You
Most investors, especially first-time ones, choose to work with a real estate broker when looking for property. However, it is advisable to start the search for property on your own. It is easy to get swayed by a broker into buying a property you had not intended to. It is critical to remain unbiased in your search for properties that are within your budget.
Another important thing to consider whether you will be managing the property by yourself. It’s advisable to buy a property that is near where you live if you will be managing it on your own. On the flip side, location will not really matter if you will be hiring a real estate company to manage the property on your behalf.
Location of the Property
Consider the neighborhood where the property is located. You can know the expected vacancy rate and type of tenants to expect based on a neighborhood. For example, if you purchase a property that is near a college, you can expect most of your tenants to be students. Moreover, you can expect regular vacancies as the students finish college and move away or when the institutions close for the holidays.
Keep in mind that is some municipalities, property owners are discouraged from setting up rental properties. The municipality may impose high permit fees and various other bureaucratic measures to discourage rental property investors.
How Much Taxes Will You Pay?
Another important factor to consider before buying investment property is taxes. The amount of taxes you will be liable to pay will not be uniform across an area. Find out how the payments will impact your income from the properties. Sometimes, high taxes may not be such a bad thing, especially if the property is located in an area with low vacancy rate and long-term tenants. However, you should do the math to determine the impact of taxes on your expected income before buying a property.
You can find out how much taxes you will be liable to pay by contacting the municipal’s assessment office.