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Tips on Purchasing an Investment Property

For many, owning a second property is the dream. Buying an investment property is a serious endeavor, and for those adventurous and financially capable of investing in a home or property outside of their own, there are several things to consider during the process of acquiring new property.

Here is a list of suggestions for those looking to invest:

  • Property Use. First, consider what you will be using the property for. Is the space compatible for what you plan to build on it? Consider surrounding sound, location, and zoning laws before committing to a property.
  • Extra Costs. Second, thoroughly investigate the state of the property or buildings upon it. The extra costs incurred from things like rebuilding a foundation or installing a safe heating system can be pricey. It helps to hire a professional to give your building a thorough inspection.
  • Re-Selling. Buying investment property is exciting, but you need to keep in mind the viability of selling it later. Consider things like trends in the real estate market, crime rate in the area, amenities nearby, and any future city development plans in the neighborhood. Ideally, you want a property that will continue to increase in value.
  • Crunch the Numbers. Math is an important part of the process. Investment properties are generally medium to long-term investments, meaning you may not be reaping the benefits of your purchase for a while. With maintenance and paying taxes and a mortgage, the upkeep on these properties can be expensive. Knowing what you are getting yourself into will keep you from unwanted financial surprises.
  • Hiring a Solid Mortgage Broker. Hiring a knowledgeable and trustworthy mortgage broker can make all the difference in purchasing an investment property. Mortgage brokers act at the intermediary between the buyers (you) and the lender (the bank or lending institution.) Hiring someone you trust will ensure you make the right decision and give you confidence in moving forward with your property.
  • Becoming a Landlord. If you plan on renting your investment property, understand that this means becoming a landlord. As such, you have little control over those living inside. Tenants, although generally bound by a legal document to pay rent and keep the unit in good shape, can cause damage or refuse to pay rent. Be sure to choose tenants you trust, and even so, assume there will be some damage and wear and tear.
  • Aesthetics. Sometimes it can be difficult to put your personal creative ideas to the side. With an investment property, it’s important to cater to the desires of the mass market. Pick simple colours and a pleasant design to get maximum attention.

If this is your first time buying an investment property, the professionals at Mortgage West – The Mortgage Centre, can help you make a sound, knowledgeable investment. Contact Rose Blankenagel today for more information.