Wouldn’t it be great if there was a brochure with everything you ever needed to know about purchasing your very first investment property but were afraid to ask? I’m sure they exist out there somewhere. But I’ve tried to take the guesswork out of it for you (as well as the legwork) and placed all of my favourite tips here in one spot, to make sure you’re well-equipped and armed with all the correct info you need to get started.
First things first:
Assess your current financial situation.
This may seem obvious but it’s easy to get swept up in the excitement of purchasing an investment home! It’s always important to ensure you have all your finances in order, a solid credit score, and to make sure any loans you may have are fully consolidated. You may also wish to give yourself some time to save up for a more significant down payment, so you can go ahead and get pre-approved for a mortgage.
Be aware of housing markets in your surrounding area.
It’s important to remember that while real estate has been appreciating for some time, there will always be cool-off periods, and certain areas could be more affected than others. After all, trends don’t always move in one direction. You’ll want to make sure any property you invest in is worth the financial risk, and, more importantly, that you have enough funds set aside to accommodate said risk. Speak with a real estate professional to make sure and you’re keeping your own risk tolerance in mind.
Zero in on your preferred neighbourhood.
Follow real estate trends in the areas that interest you, and select a location accordingly. Neighbourhoods can be real diamonds in the rough, with huge potential for growth, or already well established and popular, but with little room for financial returns. Somewhere in the middle might end up being your best bet, depending on how much work you want to do on the property, and how much value will be added to the area in the years to come. Is there greenspace nearby? Good schools? Transit options and walkability? Who makes up the demographic? All of these contribute to the desirability of a neighbourhood, and therefore, your eventual return on investment.
Decide what kind of home you wish to invest in.
A property to be divided among renters? A duplex? A single family home? Will you want to undertake extensive renovations or make a few small cosmetic changes? Whatever you choose, make sure it reflects your current financial situation and that your goals remain realistic.
Find the right agent!
It goes without saying you’ll want a REALTORⓇ who’s extremely knowledgeable about your areas of interest and home values in general, but who also understands you and what you wish to get out of this investment.
Feel free to contact me with any questions you may have as you embark upon your investment property journey. I look forward to working with you!