Whether you're a young professional or nearing retirement age, buying a second home to use as an investment property to rent out can be hugely beneficial. Provided that you take the right approach, this purchase can provide you with a significant amount of money in the years to come. If you don't have any previous experience with investment properties, it's useful to take a methodical approach to buying the home, as you want to be sure that it suits your needs. It's also a good idea to have a real estate professional help you through this process, as they can provide insight that can help you avoid any problems. Here are some tips that you should follow to reduce your stress.
Buy Within Your Means
It might sound obvious to buy within your means, but when you're shopping for a home to use as an investment property, it's easy to buy something that's a little more costly than you had planned. The premise in doing so, you might argue, is that you'll be able to charge more for rent and thus make more money. However, there can be pitfalls that you encounter. If you have trouble finding a tenant, the mortgage payments can lead to financial stress. Or, you might also find that the property taxes are a challenge for you to pay. It's better to start small with an inexpensive property.
Stay Away From Older Homes
Older homes can often be affordable, but they aren't always a good investment when used as an investment property that you'll rent out. Old homes tend to need more maintenance, which can quickly dry up your available funds. For example, you might need to replace appliances, plumbing fixtures, electrical wiring, or other such issues. When you buy a newer home, it will ideally face fewer of these problems, and it will also be covered under warranty by the building corporation.
Buy Near Where You Live
It's ideal if you can buy the investment property somewhat near to where you live. You'll find that you need to occasionally visit, whether it's to meet with a contractor or check something the tenants have brought to your attention. If you have a long drive to the home, you'll spend too much travel time, which can lead to stress. The investment property doesn't have to be in your neighborhood, but you'll appreciate having it just a few minutes away from your home.