Did you know that two-thirds of net worth comes from real estate? That’s according to Kiplinger. And owning your home is a great way to build wealth. But what about an investment property to rent out? About one in every six or seven purchases are for an investment property. So how can you better evaluate the decision to enter the investment property market?
Whether you’re a realtor helping clients make this decision or a buyer interested in purchasing yourself, My City Mortgage originators can help calculate the return on an investment based on area-specific appreciation, rental rates, and costs to buy and sell.
Understanding leasing, mortgage financing, tenant-landlord relations, and property management are necessary when buying rental property. Real estate purchases can be profitable, but they also have advantages and disadvantages, just like any other investment.
- Investors in a rental property typically require a down payment for a mortgage.
- A landlord needs a wide range of abilities, from knowing the fundamentals of tenant law to replacing a broken faucet.
- A hands-off passive investor may decide to hire a property manager or buy shares of real estate investment trusts (REITs).
- Full-time investors invest a lot of time in selecting properties and preparing them for sale or rental.
- Vacation houses, multi-family homes, and single-family homes are all acceptable types of investment rental properties.
Is paying cash preferable to financing a real estate investment? That depends on the objectives and savings of the investor. Reach out to a local loan originator to learn more today!