Buying An Investment Property

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BUYING AN INVESTMENT PROPERTY
By Diane St James © 2002

Some folks have been asking me lately for some good tips for buying investment properties. So I thought I would share a few.

1.LOOK FOR THE BARGAINS

First and foremost, if at all possible, seek out a property that is up for sheriff sale or has been repossessed by HUD. There is a good possibility that you can get it for a much lower price than fair market value. Just make sure that you check it out before making an offer. If it is in total need of renovation, you may not have the resources or it may not be worth it once you've spent thousands getting it 'livable'.

You can check the local paper, courthouse and some
websites that list these types of properties and check
them out. Look at the surround areas as well to see if
the neighborhood is maintained or getting run down.
If there are houses on the street that are boarded up,
you may want to pass. It may be difficult to get a
good paying tenant in it even if you do get it at a good
price.

2.LOCATION, LOCATION, LOCATION

This is a favorite thing that real estate agents like to say, but it is true! Look for rentals in areas where there will always be a demand for housing. Choose properties in busy towns or cities versus out in the country where you may have to worry about vacancy factor and the amount of rent you will be able to demand.

You can also choose hot vacation spots such as shore rentals. Many folks pay top dollar to rent a place near the beach, although these will cost more as well. But if you have enough for the initial investment, thousands can be earned just during the summertime.

3.THINK IN NUMBERS

When thinking of an investment property, think in terms of maximizing your rental income. This means look for the 2, 3 and 4 unit properties. The more units a dwelling has, generally the more rental income to be made. If you purchase a 3-unit property that can demand rent of $600/month for all three units and it costs you $1200/month in mortgage payment, you not only have enough rental income to cover the mortgage payment but also have $600/month net profit. You will need more money down, the more units you purchase but it could be worth it if you have the assets.

With these tips in mind, you also have to consider the work that may be involved with owning investment properties. You could have problem tenants, maintenance and repair expenses and inconveniences, and possible times of vacancy. But if you are willing to take the good with the bad, you are ready to start looking for your first investment property.

Purchasing investment properties can be a great way to provide income and increase your net worth in real estate. Happy hunting!

-----

Diane St. James is a mortgage professional with 21 years experience. Her website www.abcmortgage.net exists to help educate people about the Maze of mortgages. She is the author of "How to Get a Mortgage," an E-book filled with vital tips and secrets, and publishes a biweekly Ezine Diane's Mortgage Tips + Other Tidbits. To subscribe mailto:report@abcmortgage.net?subject=subscribeme
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Permission is granted to reprint the following article as long as no changes are made and the byline, copyright information, and the resource box is included. Please let me know if you use this article by sending an email to diane@abcmortgage.net

Home Page	BUYING AN INVESTMENT PROPERTY By Diane St James © 2002 Some folks have been asking me lately for some good tips for buying investment properties. So I thought I would share a few. 1.LOOK FOR THE BARGAINS First and foremost, if at all possible, seek out a property that is up for sheriff sale or has been repossessed by HUD. There is a good possibility that you can get it for a much lower price than fair market value. Just make sure that you check it out before making an offer. If it is in total need of renovation, you may not have the resources or it may not be worth it once you've spent thousands getting it 'livable'. You can check the local paper, courthouse and some websites that list these types of properties and check them out. Look at the surround areas as well to see if the neighborhood is maintained or getting run down. If there are houses on the street that are boarded up, you may want to pass. It may be difficult to get a good paying tenant in it even if you do get it at a good price. 2.LOCATION, LOCATION, LOCATION This is a favorite thing that real estate agents like to say, but it is true! Look for rentals in areas where there will always be a demand for housing. Choose properties in busy towns or cities versus out in the country where you may have to worry about vacancy factor and the amount of rent you will be able to demand. You can also choose hot vacation spots such as shore rentals. Many folks pay top dollar to rent a place near the beach, although these will cost more as well. But if you have enough for the initial investment, thousands can be earned just during the summertime. 3.THINK IN NUMBERS When thinking of an investment property, think in terms of maximizing your rental income. This means look for the 2, 3 and 4 unit properties. The more units a dwelling has, generally the more rental income to be made. If you purchase a 3-unit property that can demand rent of $600/month for all three units and it costs you $1200/month in mortgage payment, you not only have enough rental income to cover the mortgage payment but also have $600/month net profit. You will need more money down, the more units you purchase but it could be worth it if you have the assets. With these tips in mind, you also have to consider the work that may be involved with owning investment properties. You could have problem tenants, maintenance and repair expenses and inconveniences, and possible times of vacancy. But if you are willing to take the good with the bad, you are ready to start looking for your first investment property. Purchasing investment properties can be a great way to provide income and increase your net worth in real estate. Happy hunting! ----- Diane St. James is a mortgage professional with 21 years experience. Her website www.abcmortgage.net exists to help educate people about the Maze of mortgages. She is the author of "How to Get a Mortgage," an E-book filled with vital tips and secrets, and publishes a biweekly Ezine Diane's Mortgage Tips + Other Tidbits. To subscribe mailto:report@abcmortgage.net?subject=subscribeme --------------- Permission is granted to reprint the following article as long as no changes are made and the byline, copyright information, and the resource box is included. Please let me know if you use this article by sending an email to diane@abcmortgage.net