Saturday, 15 December 2012

Guide to buying an investment property

The Millionaire on Heels had an investment property up until a year or two ago.  It was not a conscious acquisition, but rather a byproduct of my decision to upgrade from an apartment to a house.  Here are a few pointers that I would heed myself before embarking on the investment property bandwagon again.

The process of financing an investment property is reasonably similar to that outlined previous posts on mortgage refinancing and buying a first or new home.  If you haven’t read them already, you can find them at:
http://www.millionaireonheels.com/2012/12/mortgage-refinancing-guide.html
http://www.millionaireonheels.com/2012/12/mortgage-application-process.html
http://www.millionaireonheels.com/2012/12/guide-to-buying-your-first-home.html


However, I thought I should share a few additional tips specifically related to investment property:
  1. Do a business case upfront, considering the revenue, cost, and risk of several different property options.  What is easy at the time may not be the best financial investment.  In my case, I thought I’d just rent out my previous home until I found a new one.  I didn’t look at any alternatives in different suburbs, cities, or states that could have been much more profitable.