Your Investment Property Guide - Prudential Locations

Your Investment Property Guide Adding A Home To Your Investment Portfolio Table Of Contents Adding A Home To Your Investment Portfolio Investors Are Becoming Landlords ................................................................................................3 What Is An Investment Property? ..................................................................................................3 Things To Consider Before Investing Does An Investment Property Fit Your Financial Plan?..................................................................4 Do You Want To Be A Landlord? ..................................................................................................4 Location, Location, Location ........................................................................................................4 The “Typical” Rental Property ......................................................................................................4 Setting Parameters..........................................................................................................................5 Beginning Your Search The Preapproval Process ....................................................................................................................5 Shop Like An Investor....................................................................................................................5 Considering Condos or Co-ops ......................................................................................................6 An Expert Home Team Makes A Big Difference Building Your Team ......................................................................................................................6 Real Estate Agents..........................................................................................................................6 Appraisers ......................................................................................................................................7 Investment Property Financing Experts ..........................................................................................7 Follow Up Teamwork With Homework Do Some Research ........................................................................................................................7 How Much Should Your Property’s Rent Be? ................................................................................8 Calculating

Cash Flow ..................................................................................................................8 Tax Implications ............................................................................................................................8 Applying For Your Loan..........................................................................................................9 Preparing For Closing ............................................................................................................9 Renting Your Investment Property Finding The Right Tenants ..........................................................................................................10 Setting Your Standards ................................................................................................................11 Preparing a Lease: Get Legal Advice ............................................................................................11 The Lease-To-Purchase Option ....................................................................................................11 Maintaining Your Investment Property Keep Your Investment In Shape....................................................................................................12 The Property Manager Option ....................................................................................................12 Additional Resources Investment Property Checklist......................................................................................................13 Real Estate Listings Decoder ........................................................................................................15 Glossary ....................................................................................................................................16 2 Adding A Home To Your Investment Portfolio Investors Are Becoming Landlords Stocks go up. Stocks go down. Economies ebb and flow. The value of real estate rises and falls. No single investment can promise uninterrupted profit. That’s why savvy investors diversify their holdings. Since real estate — like the stock market — tends to ride out its up and downs well, providing good long-term results, record numbers of people have been buying second properties as investments. Purchases have risen 25% over the last five years to $50 billion and are expected to reach $150 billion by 2005. In fact, forecasters expect Americans to purchase 3.6 million second homes over the next 10 years. That’s about 1,000 a day! While the majority of all second homes are used for recreation, a benchmark study by the National Association of Realtors® (NAR) says investment property sales rose from 20% in 1999 to 37% in 2002. And in the first quarter of 2003, for the first time ever, more people bought investment properties than vacation homes. Is it the right time for you to follow this growing and potentially rewarding trend? This guide will help you make the decision. It provides an overview of what to look for in an investment property, the benefits and potential problems of being a landlord, and the choices for financing your investment. What Is An Investment Property? Primarily, an investment property is one purchased strictly for the purpose of generating income. It’s neither your current primary residence nor a vacation home used only by your family. An investment property is usually purchased with the intention of either renting it out or renovating it to resell at a profit. There are also some variations on that theme. For instance, when a family relocates or decides to downsize, a primary residence can become an investment property if it doesn’t need to be sold. Another investor may buy a multifamily property, choosing to live in one part while renting out the other. Other owners may choose...

Website: www.prudentiallocations.com | Filesize: 96kb
No of Page(s): 20
Download Your Investment Property Guide - Prudential Locations.pdf