What Do I Need To Know About Buying My First Rental Property?
With Mike Fast, of Royal LePage Riverbend Realty
What do I need to know about buying my first rental property?
With today's red hot market many of the calls we get are from folks interested in purchasing their first rental or revenue generating property. We love these calls because it’s something we frequently invest in ourselves and believe it's a great place to build net worth. Here are some quick things to think about when looking for your first investment property:
1. How much do you want to invest. Generally banks want 25-30% down for a revenue property which can come from cash or equity from other properties you own. This often comes as a surprise to folks.
2. With the interest rate your bank will give you does the property cashflow. Things to think about are property taxes, maintenance, vacancy and insurance in these calculations. Your lender wants to see a well thought through business plan so make sure you include these in your projections.
3. Location, location, location. The golden rule of real estate still applies to rentals. You may apply a different lens to what location is good in a rental but a great location generally means easier to rent, faster appreciation, and higher rent rates.
If you're looking to add a property to your portfolio we would be happy to share our experience to help you make a good investment decision.