With so many uncertainties in today’s economy, it is difficult to evaluate the options that might be worth investing your money in. Investments hold potential risk, yet the return could prove to be substantial. Putting your money into a Boston downtown condo as and investment, for example, has a high risk, but if you’re lucky and the market is right, you stand to gain a great deal.
Taking the time to learn which Boston downtown condos are worth investing in and how to keep an eye on the local market near you can put more money in your pocket and help steer you towards financial independence. Check out our tips for buying an investment property below.
First: Are You Prepared to Invest Your Time and Money?
Owning and maintaining investment real estate might prove to be a durational and financial burden and take up a lot of time and money. It’s not like the stock market, where you can just invest and let chance take the wheel. You have to search out affordable properties for your area, learn about the area, vet tenants, maintain the property, and have plenty of start-up capital to make it worth your while.
Having a partner certainly helps with issues like perspective, decision-making and time management. If you have a business partner that you trust to make the right call, then consider making it a joint venture.
Even a good Boston downtown condo will need startup capital to run inspections, pay utilities, repairs, and lawyer’s fees. See the section on financing below to find out more.
Second: Location Is Key For Your Investment Property
Your investment property doesn’t need to be in the most expensive part of town, but you want to make sure it’s right for your vision. Are there schools nearby? What is the crime-rate? Is there an abundance of foreclosed residences or businesses surrounding your potential property? Visit the area to get a first-hand look at what you are investing in.
You never want to blindly invest in property, so invest in somewhere that you know and can follow up on.
Third: Types of Investment Real Estate
For first-time investors, start small. Don’t worry about that two-story historic townhouse in Boston Beacon Hill. While it’s beautiful, the maintenance on a property like that is huge.
Search Google for affordable multiple-dwelling unit. Make sure the property is worth your time and effort. Beware of properties that are too good to be true—they may just be hiding major structural damage or have a nest of problems down the road.
Fourth: Financing
If you have steady income, a good credit score, have a good debt-to income rating, and pay your bills on time, then obtaining a loan is in your best interest. FHA loans can help you acquire a property with little down payment (as low as 3.5% of the total price). Speak with other real-estate agents in the area to find out which loans have lower interest rates and have incentives for homebuyers.
Also, set aside a little money for your Charles River Park condo to ensure you aren’t struggling in the event of vacancies. Talk with local property management companies about surrounding vacancy rates, rental prices and strategies.
Fifth: Property Management
Landlording is a serious business, and if you are willing to get your hands a little dirty, then you can save a lot of money by managing your first property by yourself. If not, keep a list of professionals handy for routine maintenance.
When you invest in a property, you aren’t just going to sit back and collect a check. You have tenants, property maintenance, seasonal weather, city ordinances, and insurance that all play a big part in your investment.