Buying Investment Properties – Buyers Market

People who want to invest in property are finding that with today’s low housing prices, they can cash in on the savings while producing some long term profits. The recession, along with a depressed housing market, has created a buyers market on investment properties. People who have the assets for buying investment properties could see some substantial profits in this market. Although, new investors will need to research ways to avoid the dangers and risks that that can cost them if not avoided. Do you want to invest in buy to let property that will pay for itself? Are you considering an investment that will net you some income from house property? Then you will find the following information very useful.

Successful investments

Where the property is located either means you lose money or you make a profit. Over time a property will increase in value and the location of the property will directly affect it. Appreciation of property that is located in bad neighborhoods or near busy highways will not increase in value as quickly. Successful investments might include locations near good schools, and public amenities such as bus lines or libraries. While you may have to spend more money on the property, it will be a better investment in the long run.

Calculate the investment

The new investor will have to calculate how much they are going to invest in the property.The consideration of mortgage payments will have to be weighed against what the market will bear for rent. If you are going to rent the property out on a monthly basis, then the rent that you determine needs to cover as much of the mortgage as possible in the beginning until the property appreciates in value and creates wealth. After a while you will have to also factor in maintenance cost into the amount of rent you receive. In order to receive a profit, most successful investors will tell you that you need to charge 125% of the mortgage payment as rent.

Closing the mortgage

A competent real estate agent, an attorney and a lender will be needed when you have decided to purchase a property. Everyone that you work with needs to come with recommendations and the necessary credentials that they need.You may be required to report your income to states that have “buy to let” laws. The attorney that you use will need to be familiar with the state laws that govern the contract that you sign.

Necessary repairs

If you only use licensed, bonded, and insured contractors for any needed renovations, you will save money in the long run.It is a good idea to get guarantees from reputable contractors in case the work needs to redone Unless you manage the property yourself, a property manager will need to be hired to collect the rent and make arrangements for any needed repairs.

Buying investment properties are a lucrative business in a down economy and an opportunity for those that have money to invest. By renting the properties out, buy to let properties allow the owner to pay the mortgage as the property increases in value. More importantly, the income from house property can eventually pay the mortgage and provide a sizable profit margin.

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