5 Questions to Ask Before Buying an Investment Home

If you are considering buying investment home property, there are several things that you will need to take into consideration. Investment homes can provide you with a number of benefits as an investor. However, if you want to make sure that you get the best deal, you will need to ask the proper questions first. Here are a few questions to ask before buying an investment home.

1. Will I Be Able To Sell This Property?

When getting involved with an investment property, you need to consider your exit strategy in the future. Even if you plan on holding the property for several years, you need to consider whether or not the property is marketable. Generally, you want to get involved with properties that could be easily sold in the future. Investing in a property that is in a good location and in good condition can help you get your money back out of the investment much quicker. No one wants to be forced to sit on a property for years without being able to sell it.

2. What Kind of Cash Flow Can I Expect?

When investing in real estate, you want to continually be thinking about cash flow. Generating a positive cash flow is critical if you are going to succeed in this business. You want to find a property that will be able to pay for itself over the long-term. If you have to constantly pour money into the home, it will most likely not be worth your while.

3. What Repairs Are Necessary?

Before making an offer on an investment property, you will want to make sure that you understand how much money you will have to spend on repairs. Even if you have walked through the house, you need to have an estimate of what repairs will be required of the house. You might want to consult with a building inspector so that you will know if the house is up to code. Last thing you want to do is buy a house and then find out you have to make thousands of dollars worth of repairs to it.

4. What Has Already Been Done to the Property?

It would also be helpful to know what renovations have already been done to the property. For example, if a new roof was recently installed, it would be nice to know that you will not have to replace it in the near future. If the previous owner had a new water heater or other appliances installed, this would also be something that you need to know.

5. Will This Be Easy to Rent?

If you are purchasing an investment home in order to rent it out, you might want to determine how easy it is to find renters in this area. If the property was already being rented out, find out how often it was vacant. If a property does not have a good rental history, you might want to avoid investing in it.

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