If you’re looking to diversify your investment portfolio and want a stable, long-term option, you may want to consider buying an Investment property. After all, real estate is one of the safest and most lucrative long-haul investments you can make. To learn more about the top three tips you should keep in mind when looking for your first investment property, read on.
1. Get a Manageable Mortgage
For any property you purchase, whether it’s your primary home or your investment, you’ll want to be sure that the mortgage is manageable for your budget, leaving you with enough income for other expenses. One rule of thumb to keep in mind is to spend no more than a quarter of your take-home income on your monthly mortgage. The advantage with an investment property is that rent could potentially cover your mortgage and property taxes, meaning you get a passive stream of income! Try to look for motivated seller leads, these leads could be a great investment.
2. Choose Good Neighborhoods
In order for your real estate investment to appreciate over time, you’ll want to pick a property located in a good neighborhood. Even if the property itself is a fixer-upper, the location can make a huge difference in rent you could charge and future resale value, for instance. Look for areas with low crime rates and good school systems.
3. Pay Attention to Tax Benefits
Finally, if you’re considering buying a place, you’ll want to pay attention to the taxes involved, as you may get certain tax deductions allowed for owning a rental property. Possible write-offs could include mortgage interest, insurance, repairs, property taxes or more. These deductions can definitely add up over time, making your initial investment well worth it!
Investing in real estate is a smart move that can provide passive income and a solid return on investment for years to come. If you’re interested in buying your first investment property and diversifying your portfolio, a little planning can go a long way. With these three top tips, you can make a confident, well-informed investing decision.