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Buying investment property

12/23/2016

 
​Whether you're considering purchasing a multiunit complex for immediate rental, buying a home now with the idea of selling it a few years or profiting from the purchase of a fixer-upper that can be resold at a much higher price, here's what to look for when considering real estate as an investment:

Plan on a big down payment. Mortgage insurance isn't available for investment properties, so a 20 percent down payment is required to get traditional financing. And putting even more down can result in a better rate. Also, loan costs are generally higher for investment properties.

Enjoy being handy and fixing things. Opting for the landlord route brings with it lots of challenges, including making repairs. Be sure to have enough savings on hand to handle any unexpected repairs in the short term – before the rent checks start rolling in.

Income varies. Tenants come and go, and it may take a while to rent out a just-vacated unit – especially if it needs substantial repairs or rehabbing, reducing your income. But you'll still have to pay the bills, including mortgage, property taxes and insurance.

Property taxes. Depending on the type of rental property purchased and how long it is kept, investors could discover a big increase in property taxes, if a homestead exemption had been in place for the previous owners.

Beware of fixer-uppers. If you're new to investing in real estate, beware of taking on a bigger challenge than you can handle. Unless you have the skills for large-scale improvement – or know someone who does quality work at bargain prices – you'll likely pay too much to rehabilitate the property and still make a profit on its sale. A better option is to look for properties that need modest repairs that are priced at below-market rates.

Start small. While repairs present a challenge, so can buying a larger property than you're ready to handle. Starting small – purchasing a single apartment, condo or duplex, for example – can help you get grounded in the idea of investing in real estate and decide whether it's really the right step for you.

Choose your partners wisely. If you can't afford to buy property on your own and wish to enlist co-investors, be sure you're comfortable not only with your business partner but the agreement struck up to purchase and manage the investment.

Last but not least, your not alone. I will guide you through every step of the way to ensure we have a smooth transaction. 

​Let's get started!

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 Eric Rodriguez 

CEO, Lifestyle Realty
Ranked Top 1% Nationwide
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📲 ​Direct: (209) 404-8898
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Lifestyle Realty ​CalBRE#01962337

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What Clients Are Saying:

"This is my second transaction with Eric. The first time Eric assisted us was back in 2016 when my husband and I were first time home buyers. During that time we had a little knowledge on the home buying process. We were young and eager to get into our first home! Looking back I can’t tell you how thankful we are to have had Eric on our team guiding us through the process. He truly had our best interest and future in consideration throughout the whole process. Fast forward now to 2019 we called Eric to sell our home. I must say after the first time working with Eric I didn’t think it could get much better or go any smoother than the first time. I was completely WRONG! Eric continued to exceed all the expectations we had set and crushed every goal we discussed. Eric listed our home and within 48 hours we received an offer. The offer lead to our home selling for $20,000 over the asking price! This is all credited back to Eric and his outstanding team that helped us throughout the process from our first meeting, to preparing our home, and finally the quick 30 day escrow. We are currently working with Eric on the purchase of our new home that will be completed in December. We have recommended our family and friends to use Eric’s services. They have all been very pleased with how quick and professional the process went. We are grateful for all Eric has done and will continue to do for our family for years to come!"
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