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Rental
Property Investment Advice
How to Buy Rental Property in 7 Steps PART 2
Do you want
to buy a rental property investment but you are turned off by the
lengthy
and confusing buying process? Our rental property investment advice
will show you do it quick and easy in this Part 2 of our step
by step Guide on How to Buy Rental Property.
Have You Read
Step 1 to 4? If No, Click for Part 1 of
How to Buy Rental Property Guide
Step
5: Shop for a Rental Property Mortgage and Get Yourself Pre-Approved
Getting
your hands on a mortgage loan is one crucial step when you are buying
rental property investments. Unless you can afford the entire cost of
the property, no mortgage loan simply means no rental property for you.
A
rental property loan is different from your usual home loan because
your lender will usually require a large down payment and charge you
slightly higher interest rates. That's another reason for you to take
your time and look for the cheapest loans from the local banks or
financial institutions.
Before
meeting any mortgage lender, you will also have to prepare all your
important paperwork and documents. This includes your identification
card, driver's license, social security card, bank accounts, investment
accounts, pay check and income statement. Click here for the full
list of documents that you will need for your landlord mortgages.
Step
6: Hire a Home Inspector or Licensed Contractor to Inspect the Property
While
it's not a must to have your rental property inspected, it's
recommended that you have it done to avoid any nasty surprises. If you
are learning how to buy rental property, you must know that certain
type of damages such as termite infestation or water damage are almost
invisible to the untrained eye but can rake up massive repair bills.
A home
inspector or licensed contractor will also be able to give you a more
accurate estimate of the repair bills to get your rental property up to
shape. This is especially important if you are dealing with run-down
properties that require extensive repairs (commonly labelled as fixer
uppers).
Studies have shown that most rental property investors under-estimate
their repair costs so there is a real danger that you can go broke just
trying to improve your rental property investments to a habitable
condition
according to the local housing standards.
Step
7: Make an Offer to the Seller and Negotiate the Price & Terms
with Him
Knowing how
to buy rental property often means knowing how
to bargain your way to a great deal. Firstly you have to know the
difference between your seller's asking price and reserve price.
Asking
price is the price tag that your seller puts up while reserve price is
lowest amount that he is willing to accept for his rental
property.
In
almost all cases, his reserve price will be lower than the asking price
so do not be afraid to make an offer if you spot rental
property invesments with
great potential but the price tag is too high. In fact we do know
of this seller who had asked for $265,000 but ended up
letting go of his rental property at less than $100,000.
Once
you are happy with the price of your rental property investment, it's
time to seal the deal. During closing time, remember to negotiate the
terms of the sale and try to have the seller share the closing fees and
sales expenses with you.
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what our visitors have to share below OR Scroll down to
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Buying a Rental Property Investment?
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What Our Visitors Have to Say When it Comes to Buying Rental Property
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