Buying investment properties to either rent out or resell can be both profitable and personally fulfilling. Here are few things to know when starting out.
Work with an MIG mortgage lender in Oak Ridge to obtain the mortgage that best suits your needs. There are many options to pick from, enabling you to choose the loan with the terms and conditions that enable you to make a viable purchase. Lock in your mortgage at the right time to keep costs low and maximize your profits.
Ideally, you’ll want to find properties to purchase that require little or no maintenance. However, don’t automatically discount a home, apartment or condo that needs some initial repairs. Consider the neighborhood, current condition of the local real estate market, your future plans for the property and other factors so you don’t inadvertently pass up what could be a very good deal.
Renting your properties out can be more time-consuming than reselling them as you will need to screen prospective tenants and then work with them long-term. Even so, renting can be a profitable line of work, especially if the properties you purchase are located in areas that allow short-term rentals. At the same time, reselling your properties may be to your advantage, especially if demand is high and you receive a good offer.
Homeowner’s insurance doesn’t typically cover rentals, which means you’ll need to look into landlord’s insurance. There are various policy options and costs vary depending not only on where the house is located and the size of the property but also on the type of rental activity you are engaged in. Even so, aspiring landlords can expect to pay as much as 20% more on landlord’s insurance than regular homeowner’s insurance. At the same time, investors selling a home will need a specialized form of insurance for the vacant home. This coverage is also more costly than regular homeowner’s insurance as a vacant home is a higher risk to insure than one that is occupied.
Consider your options carefully when selecting homes to invest in. Start in an area you are familiar with and get professional assistance from a loan officer in Oak Ridge, a reliable insurance agency and others to make wise investment decisions that you can be proud of.