5 Deadly Mistakes Most Investment Property Buyers Make
"...be sure not to enter the Investment Property arena blindfolded..."
Everyday people are
considering purchasing an Investment Property and making some quick money.
Don't be fooled. Surely, you would agree that investment decisions shouldn't be
taken lightly, and an Investment Property purchase is no different. By taking
these few minutes to acquaint yourself with the "5 Deadly Mistakes Most
Investment Property Buyers Make", you can greatly increase your chances of
making your investment successful and save thousands on your mortgage.
1) Not Making a Profit From Day One
Make sure your interest rate will allow for a positive cash flow when you rent the
property. While you will hopefully make equity over time, cash flow is often a
make or break consideration.
2) Choose the Right Amount For Your Down Payment
Twenty percent down used to be the necessary amount to get into an investment
property, but today ten percent can be enough. Be aware that the down payment
amount will usually influence your interest rate, and interest rate will
determine your properties cash flow.
3) Not All Mortgage Brokers Are Created Equally
Be sure to ask your mortgage broker about available loan products, terms and
rates, and when comparing brokers, be sure you compare 'apples to apples'. A
subtle difference could save or cost you thousands.
4) Your Real Estate Agent is Unlikely to Understand the Process and Unique Needs of an Investor
Your mortgage broker and real estate agent need to work in concert for the best
possible outcome. Only hire a real estate agent with investment property experience.
5) Not Understanding the Purpose of Your Investment
Do you plan to "fix and flip", rent, or sell the property to another investor?
This is a big question in selecting the best mortgage product to meet your
needs. Make sure you have considered this carefully and discussed all your
options fully with your mortgage lender. Subtle differences in your loan could
cost or save you thousands. Mortgage regulations have changed significantly
over the last few years, making your options wider than ever. Subtle changes in
the way you approach mortgage shopping, and even small differences in the way
you structure your mortgage, can cost or save you literally thousands of
dollars and years of expense.