Buying an investment property to earn rental income can be very risky. People usually do down payments.
Experts agree, however, that as with any investment, it's better to be well-versed before diving in with hundreds of thousands of dollars. There are lots of things that you have to keep in mind and investigate. You can also visit harmari.com/harmaristr/ to get detailed information regarding rental property.
Pay Down Personal Debt
Some investors might take debt for portfolio investment strategy, but some of the average person should avoid it.
If you already have unpaid medical bills, children who will attend college soon or you have any student loans, then purchasing a rental property will not be the right move for you.
Find the Right Location
The most important thing you have to keep in mind is to be stuck with a rental property in an area that is declining rather than stable or picking up steam. A place or city where the population is growing, is the potential investment opportunity.
Always Beware of High Interest Rates
The interest rate on an investment property is more than a mortgage interest rate. So, you need a low mortgage payment that won’t take your monthly profits too much if you have decides to finance your purchase.
Be aware of Your Legal Obligations
It’s important to know the rights and obligations regarding the security deposits, eviction rules, lease requirements and more in order to avoid legal hassles.
Should You Buy or Finance?
Is it better to buy with cash or to finance your investment property? That depends on your investing goals. Paying cash can help generate positive monthly cash flow.