Creating Wealth Through Real Estate
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4 Ways To Purchase An Investment Property
I’ve heard a lot of reasons why not to purchase. How about flipping it around to reasons to purchase? How do investors grow their income property investments? Some of these may sound simple and they are but what might not be so simple is the self-discipline to not only start but execute.
Pay-off All Your Debt-Paying off current debt, think credit cards and auto loan payments will assist you in qualifying for more with lenders. In addition, freeing up your debt leaves available to absorb any unforeseen issues that may arise with purchasing an investment property. A home inspection and home warranty only cover the surface. Have a cushion of funds set aside for an emergency for the property.
Join Collective Forces-Have a family member or friend willing to partner up? In high-cost areas like San Diego, Los Angeles, and San Francisco, yes all in California, the median detached home price exceeds $600k. It has become increasingly harder for millennials to enter the market with not enough savings and lacking the creativity to put their credit and money to work for them. Partnering can help both parties as they pay down the mortgage together and earn equity as the property value increases. Have a short and long term plan. Can you rent your room in the house if things go south with the partner(s)? What is the market forecast for over 3-5 years? Make sure you have an agreement in writing and a trust in place for each of you. Consulting professionals can save you a lot of time and money along the way.
Buy Smaller Live in and Rent Out-Buying a property with the intention of eventually renting it out could be a win-win as you step up in the market. Set up a free consultation with a mortgage professional to understand the full payment and the estimated rental market in your area.
Buy Somewhere Besides California-Property values in high-cost areas like California make not be the best fit for a first-time investment property. What would it look like to purchase in another state and pay a property manager to manage it? You can also work with a California real estate agent that refers you to another agent in their network in a different state.
“Your future is created but what you do today, not tomorrow.”
Think outside of the box and get creative. Wealth building is a self-disciplined, time-consuming, and sometimes costly endeavor. Consult with a real estate and mortgage professional to crunch numbers and gain a realistic view of your options. We’re here when you’re ready!