Tricks And Tips For Buying Your First Investment Property

Redesign
The plan is to purchase a home that is “structurally sound” but needs some cosmetic work. I won’t go into great detail here, but you’d be surprised how much value you can bring to your home by doing a few simple things. You can add thousands of dollars to the value of your home by polishing the floorboards, painting the walls, or simply replacing some light fixtures. We’ll talk about how much (or how little) you can do depending on your circumstances in Chapter 6 (Revamp/Renovations). read more
Obtaining a Rental
Simply rent out your property and allow your tenants to pay your mortgage. Chapter 7 (Leasing out Your Property) will discuss the advantages and disadvantages of doing it yourself vs using a Real Estate agent.
Repeat the revaluation, refinancing, and refinancing process.
This is the most thrilling aspect of the technique that most people are unaware of. If you’ve properly ‘Revamped’ your home, it’ll now be worth more than you paid for it. The majority of people are unaware that they can obtain immediate access to this capital. Simply get your property revalued, then refinance your loan and use the extra equity as a down payment for your new home. WARNING: If you refinance, don’t use the proceeds to purchase a plasma TV or go on vacation. That stuff can wait until your second or third property. Don’t worry if refinancing sounds complicated; Chapter 8 (Revalue, Refinance, and Repeat) will explain it in greater depth. So now that you have a vague idea of what you want to buy, you must decide when and when to buy. Let’s begin with the question of where. Where should the first investment property be purchased?
This is an extremely important topic, but don’t make it too important. What I mean is that many people get so stressed out on where they can buy that they do nothing. There are numerous websites and businesses that can provide you with valuable information and analysis on anticipated ‘high growth’ areas that can earn you hundreds of thousands of dollars in the future. So, certainly take advantage of the available tools. Another factor to consider is that if you want to spend time renovating and revamping your home, it would be foolish to purchase in an area that is a 7-hour drive away. So do your homework and apply common sense. Most importantly, don’t overthink it and try to enjoy the study – it’s supposed to be enjoyable.
What is the issue now?
This is largely dependent on the location you want to purchase in. You should always aim to purchase a property that is comparable to ‘ordinary’ or ‘typical’ property in the region. What is the reason for this? You simply want it to be as easy as possible. Consider attempting to rent out a brand new mansion in a low-income neighbourhood. You’ll have a hard time finding a tenant that has enough money to afford a mansion’s high rent while still being able to live in the neighbourhood. In addition, banks use ‘comparable sales’ to determine how much the property is worth when it is revalued. In other words, they examine similar assets in your area and the prices at which they have recently sold; if there are no equivalent transactions, the banks would be hesitant to provide you with a favourable valuation.