Real estate investment is a great way to add an additional stream of income and diversify your financial portfolio. However, it’s important to know what you’re getting into with a listing before making the leap and purchasing an investment property. Below are some tips to keep in mind when visiting properties.
3 Considerations to Make Before Purchasing an Investment Property
1. Condition of the Property
While it can be lucrative to purchase a fixer-upper, don’t forget to consider the amount of time and money you’re willing to spend on the project. You should avoid any properties that have serious issues, such as a mold or structural damage, as this can cost thousands of dollars to repair.
2. Property Taxes & Insurance Costs
Even if you managed to land a great deal on a property, the taxes could affect the return on your investment. Include the property taxes in your calculations before closing to ensure it’s a favorable investment. You should also consider the cost of insurance — living in an area that’s prone to storms or flooding can drastically raise your expenses.
3. Property Management
If real estate investment is only a supplemental stream of income, you will need to find a company to manage your properties. They will take over as the main point of contact for tenants, which involves dealing with repair issues, collecting rent, and searching for renters.
If this is your first time purchasing an investment property, the team of real estate agents at Lawrence Realty in Red Wing, MN, can help you find the perfect listing. Since 1948, they’ve helped buyers and sellers navigate every step of the real estate process, from touring properties to negotiating deals. Give them a call today at (651) 388-4745 to speak with an experienced real estate agent or visit their website to browse their current selection of real estate listings.