There are a lot of great reasons to buy an investment property in the Poway area, but before you jump into anything it’s important to consider potential things that may come up later on so you know what you’re preparing for. Owning an investment property can show great return, but that usually comes from investors that did the right amount of research to prepare for what lies ahead. We’ve listed five of the most important things to discuss with your Poway investment property realtor before you even begin your search.
Far before you begin looking for an investment property, make a financial strategy to plan out how you intend to pay for the property to avoid struggling to make your mortgage later on. Most bankers will suggest that you pay down your other debts before looking into a piece of investment real estate because the responsibility is so big. Laying out an exact plan will also give you an idea of what you can realistically afford, because along with a mortgage, the expenses that come with an investment property are often construction work and property management, depending on what kind of investment property you’ve purchased.
Once you’ve determined what your financial plan and spending limit is, one of the first things you should bring up with your Poway investment property realtor is the location you’d like to invest in. Do you want to own a rental home ideal for a small family? Consider purchasing in a location that offers close proximity to a school in a friendly neighborhood. Your agent will be able to help you find the perfect location for your rental property to help assure that you make as much as you can off of it. The wrong location can make or break the success of an investment property, so find an agent—such as one from Halcyon Real Estate—that will help you choose wisely.
The delicate balance of real estate—particularly in investment real estate—is that buyers will want to find a property that will appreciate well without costing too much at the time of purchase. Pay attention to the neighborhood you want to buy in—do you see it changing? Urban expansion allows for changes in real estate prices to fluctuate for better or worse, but you want to make sure you’re on the good side of that change once it comes around. This is particularly true in homes, where investment properties in business areas—such as with a warehouse or storage center—have more flexibility as buyers don’t have to worry as much about potential appreciation.
One thing many people don’t understand when they begin their search for an investment real estate property is that it’s often a full time job. Be clear with your investment real estate agent from the start about how much maintenance you wish to be responsible for with your tenants. This will help determine what kind of property your agent helps you find, and save you the stress of having to figure it out later. It’s also a good idea to factor in a budget for a potential property manager and maintenance team should you decide to take on a more passive role.
If you’ve never purchased an investment property before and think you can simply purchase a cheap “fixer-upper,” flip it, and rent it out for a lot more money than it was worth when you bought it, we don’t recommend it. Flipping properties is risky and often hard, and unless you can find ultra-cheap labor or do the renovations yourself, you’ll only end up costing yourself more money in the long run. This can also backfire if you buy a cheap home in need of renovations in a neighborhood that can only rent for a certain amount of money. For this reason, be clear with your agent about what your intentions are with the investment property so they can help you find the perfect place.