Is it a good idea to buy an investment property?

Now that the real estate market is on the rise, some homeowners are considering buying an additional property to take advantage of remarkably low home prices coupled with low interest rates.

Is it wise to invest in a rental property?

If you’ve ever dabbled in the idea of ​​becoming a real estate investor, now may be the best time to take the plunge.

According to expert real estate agents, this is the first time in years that the perfect storm has occurred: in many areas of the country, home prices are lower than ever and interest rates are just as low. This means it is inexpensive to borrow and buy, creating the perfect opportunity for both first-time and experienced investors to purchase a new property.

4 steps to take before buying a rental property

But not so fast… Before you decide to invest in a second home, it’s important to use the following criteria to make sure you’re buying a good home that will serve as a solid investment:

1. Start with the right real estate agent. Working with the right real estate agent can make or break your investment property buying experience. If you are looking for a house in a specific area, it is best if the real estate agent knows the neighborhood and the region well in order to find the right house to meet your needs. If you’re looking for a rental property in another city or state, work with a local realtor who knows what they’re doing; A local real estate agent can also recommend an Austin insurance agent for affordable homeowners insurance when you shop.

2. Research the quality of the neighborhood. The area where you buy can affect the current value of a property, as well as how much it appreciates or depreciates in the future. If you plan to rent your property to tenants, the local neighborhood will also determine how easy it is to find a new tenant after the lease ends. First-time homeowners may do better in a densely populated area with a regular rental turnover, such as near a university or medical center.

3. Check out the local school system. If you are renting a multi-bedroom home, you may want to factor in the fact that a tenant is likely to have children and look for a good school district. Before you sign on the dotted line to buy a rental home, make sure you’re happy with the grades of area elementary, middle, and high schools.

4. Learn more about local crime statistics. If you buy a home in a high crime area, you are setting yourself up for a disaster down the road. You may have to deal with tenant complaints about regular criminal activity. When researching crime statistics for a neighborhood, it’s best to consult public records or your local police station. Specifically, learn more about misdemeanor, felony, and vandalism rates. Also, make sure you have a strong homeowners insurance policy that protects you as a homeowner, as well as your tenants in the event of theft or vandalism on your property.