Thinking about purchasing your second investment property?
If so, it is prudent to go for a property that will boost your wealth and secure your financial future.
You need to have in mind that it is by making the right decision on which investment property to invest in, that will help you attain your financial goals.
Though most people find it hard to make the right choices, it is worth the effort.
Therefore, here are four steps to guide you on how to buy your second investment property.
1.Decide on the financial implications
As an investor, it is vital to know the economic impacts of any project before starting it.
Therefore, before buying your second investment property, look at its purchase price and any other ongoing expenses.
It is advisable to tally up all likely expenses and factoring in all extra costs.
The additional cost includes such costs as hiring a management company or cost of hazard insurance.
After you have your tally of costs, you can now create a cash reserve.
2.Decide on the location
Location plays a great role in determining the kind of return to expect from your investment property.
Hence, if you consider buying your second investment property in a poorly chosen location, the chances are high that you won`t achieve your goals.
Therefore, it is imperative to conduct a market research putting into account all critical factors in property investment.
These factors include trends in house resale value, property tax rates, the strength of the local economy, medical care, and local schools.
For example, an investment property that is situated close to dumping site will have a little resale value.
Therefore, be keen when choosing the location.
3.Use your equity
In most cases, many investors decide to buy a property by combining a down payment and a loan for the remaining amount.
The higher the price you pay as down payment, the lower the loan. Therefore, it is advisable to use the equity in your first investment property.
Tapping into this equity will help you produce a larger deposit for your second investment property.
Hence, it will help you to increase both your borrowing capacity and your purchase budget.
4.Use nontraditional financing methods
To avoid high-interest rates charged by banks, finance your second investment property by borrowing money from your parents, siblings, and friends.
Furthermore, you can purchase your second investment property by partnering with another purchaser.
Shared ownership is a growing trend in the real estate market today though it entails various procedures that deal with all potential sources of contention.…