An investment property is an excellent addition to any savings portfolio. Most, if not all, of your mortgage can be covered by the income from your tenants. However, you are the one who will ultimately benefit over the years as the property grows in value. Unlike purchasing a house, there are a few extra things to keep in mind before you buy this type of property. So consider these two key points when you are thinking about buying an investment property.
DAY TO DAY CARE
If you own more than one investment property, you may find yourself getting bombarded by contact from your tenants on a daily basis. You will also need to take time out from your busy schedule to look for new tenants when old ones move out. If you do not want to be dealing with this, then you should consider hiring a property management company. A property manager will take care of the day-to-day running of your properties for you for a fee. They will deal with tenant concerns, arrange repairs, and vet incoming tenants for you. Their service fees will either be a flat rate, or a percentage based on the amount of the rent.
No matter how carefully a property is looked after, there will be times when things go wrong and repairs are needed. Make sure there is an allowance in your budgeted costs for these repairs. If they come at an inopportune time and you are unable to afford to get the repairs done, you are going to have unhappy tenants on your hands.
An investment property will grow in value over the years when it is cared for properly. That value can be used as leverage when you are looking to the bank for money to buy extra properties. In the long term, you cannot help buy win from this type of purchase.