Buying and owning property is a very satisfying undertaking. However, it is important to approach the process with care in order to avoid loopholes that may end being costly. The first thing you need to be sure about is what exactly you are buying. Consult with your expert for advice on the current cost and the expected level of appreciation. Taking into the consideration the location and condition of the house, your financial advisor will tell you whether the property you are eyeing is a treasure or not.
Have a clear plan of what you intend to do with the house. Take into consideration the down payment, interest rate charged per month, financial advisor charges and repairs that need to be done on the property before it can be used. Depending on your goals, you may want to consider buying a run down building, refurbishing it and selling it of for a profit.
Alternatively, you may want a nice cottage by the beach, where you can spend your holidays and rent it out the rest of the time. Whatever your choice, ensure that you understand the financial implications of each and make a wise decision.
You need to have a sizable down payment. You need to raise at least 20% down payment even when seeking 100% financing. Nowadays, there are banks and financiers offering 100% investment property financing. Consult with your financial consultant on the possibility of clinching such a deal. If you do not have enough cash for the down payment, talk to your mortgage broker. He or she may come up with brilliant ideas of how you can acquire the property with the little down payment you have. Smaller regional banks are also likely to give you financing for your investment property if you have a small down payment, so consider using their services.
While at it, ensure that you have a clean credit score. The higher your credit score, the lower the interest rate you will pay. Likewise, the lower your credit score, the higher the interest rate you will expected to pay every month. That is, if the financiers agree to grant you the loan in the first place. It is advisable to keep your credit clean all the time. If it is not so impressive, use credit repair services to restore it. However, do not try to suddenly repay any pending loans just because you need a new loan. This will reflect on your credit report and it will not impress. In fact, it may lower your score further.
Use the services of an experienced broker. After all, you want someone who has actually closed several deals in the past, not someone who is trying their luck! Also, work with a real estate attorney who will help you understand the terms of the contract. They will also help you come up with the right structures to protect your assets. An experienced insurance agent will also help you get your property covered.
