Tips for Prospective Property Investors

What every buyer should know before buying investment property:

• Choose your tenants first:

• If you don't want to deal with low income tenants or student rentals, then buy more expensive, more upscale rental property.

• Before you go looking, decide what kind of repairs you can do yourself and what you'd have to contract out and have a good idea of what this would cost before you buy:

• If you find a property that really needs a lot of work before renting it out, you'll need to be prepared to be able to support the building for a while as you spend the time doing the repairs.

• Do you want a lot of cash flow but maybe not much appreciation?

• This is probably low income tenants, or a student rental.

• Do you want appreciation and not much cash flow?

• This is probably professionals or a corporate rental.

• Do you want to fix up and resell and not deal with tenants at all?

• When you do this, find an up and coming neighborhood, a medium price point and be sure you know what the market wants for a quick sale.  There is no point in putting in a new furnace when the buyer is happy with a home warranty but really wants granite counter tops to show off to their friends.  The higher the price, obviously the smaller the market and the more carrying costs involved.

• Talk to your accountant

• Talk to your accountant about the tax implications of reselling property in a short period of time and know the in and out costs of buying, fixing up, and reselling property.

• Talk to your accountant about the tax implications or advantages of holding property for rental

• Talk to your insurance adviser about insurance costs of rental property and insurance liability coverage

• Talk to your mortgage lender about the costs of loans on investment propertyand how to get the most Fannie Mae loans rather than the commercial loans.

• Find out if you can reduce the interest rate by putting 25% down from an equity line on another property

• Find a realtor that specializes in investment property, that lists this sort of product on a regular basis, and who can teach you what you need to know.

If you are loyal to a realtor who you believe has your best interests at heart, they will call you when they list something that you'd be interested in and you'll get a head start on the competition

Please call 513.766.9200 and ask for The Meadows Team if you have any questions.  You can also email meadowsteam@meadowsteam.com.  We're here to help!

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