With the direction the market is going, this may be the best time ever to invest in property.
However, purchasing an investment property can be a valuable and lucrative asset, especially in Boca Raton. When deciding whether or not this investment is right for you, there are some things one might want to consider first. Ace Mortgage Loan Corporation took the courtesy to put together a list of 5 things to consider when purchasing an investment property.
Secure the Down Payment
The first step you need to do is secure the down payment. Without a down payment, you cannot own or use your investment property. Down payments normally range anywhere between 15% and 25%. Keep in mind you’ll also have higher loan costs and higher interest rates depending upon how large the investment property is.
Expected Rental Income
You need to plan your expected income to come from your tenants agreeing to pay the rent amount. You need to make sure the price you set is large enough to cover the mortgage, property taxes, insurance, and other expenses attached to the investment property. You also need to take into account having to pay for the property while a tenant is not occupying.
Length of Owning the Property
Understand that, like any other investment, real estate also requires a length of time before you can begin generating a profit. Many people choose real estate as a quick and easy way to make money but sell their property before it has enough time to pay back the principal, interest, and other costs that come from having a home mortgage. Before purchasing a property as an investment, be sure you’re committed to this long-term project.
Expenses of the Property
One problem many new property owners face when renting out their property is using all their funds to purchase the property, and having no other funds prepared in case any problems emerge in the house. Anything from an open fire, broken AC unit, or wall damage can be a costly expense. On top of unexpected costs, property owners also have to consider property taxes on their investment.
Understanding the Risks
When weighing the option of purchasing an investment property or not, one must under the risks they’re taking in order to receive the benefits. Some risks that come with an investment property, including:
- Issues with poor tenants
- Rental income may not cover the entirety of your mortgage payment
- You cannot sell your investment property if the market takes a dive or turns
- If you cannot find a tenant, you’re responsible for all the costs and expenses of your investment property
To make the best-educated decision, you need to first learn everything there is about owning and maintaining a rental property. However, when it comes to securing a loan, come to the experts at Ace Mortgage Loan Corporation to help you afford your new investment property!
For over 20 years, Ace Mortgage Loan Corporation has been serving the people of Boca Raton looking to secure loans for homes, businesses, and more! With knowledgeable and experienced loan officers, you know you’re in trusted hands, to begin with, investment opportunity! To get started, call (954) 777-4774 to speak to a representative or visit Ace Mortgage Loan Corporation’s “Contact Us” page on our website. We look forward to working with you!