Several advertising researchers suggest that our emotions play a significant role in buying decisions. And that’s acceptable when buying a place where you intend to live for many years. 

However, buying an investment property is purely business. As such, emotions will only prevent you from securing the best deals. 

Here are other real estate tips for buying your first investment property. 

1. Do Your Research

The process of buying your first investment property should begin with in-depth research.

The aim here is simple — to attract your ideal clients. That means you have to research the clients that you intend to sell or rent to beforehand. After that, you can explore the investment property options that might appeal to that specific market. 

Again, it’s essential to put your emotions aside during research. In other words, it’s best to avoid picking a property based on personal likes and dislikes. 

Instead, consider taking an analytical approach that’s based on financial factors. 

2. Secure a Down Payment

At this point, you’ve conducted research and picked the ideal investment property for your prospects. The next step is to make a down payment. 

There’s just one thing. Investment properties usually require a larger down payment than owner-occupied houses. That means the 3 percent down payment that you may have put down for your current home won’t cut it for a rental property. 

Since mortgage insurance isn’t available for rental properties, they often require a 20 percent down payment. 

The good news is bank financing such as a personal loan can help secure a downpayment for your first investment property. But, you should also expect several stringent approval requirements. 

3. Calculate Your Margins

It’s best to calculate your expenses and profits before purchasing a specific investment property.  Best Builders & Developers in Nagpur

Yes, the savviest real estate investors always consider every detail beforehand. It begins with calculating how much you have and what you need to borrow to buy the property. 

After that, you may want to consider the house’s renovation and operating costs. These include: 

Homeowners association fees

Property Taxes

Monthly expenses such as landscaping

Staff payment

A rough idea of your operating cost makes it easy to estimate how much to list your property. More importantly, you can determine the profit to expect from your first investment property. 

For example, Wall Street companies that purchase distressed properties often target 5 to 7 percent returns. NMRDA Sanctioned with RL, Residential & Commercial Plots in Umred Road, Nagpur

4. Don’t Forget the Unexpected Costs

Operating a rental property often involves dealing with several unexpected expenses. Besides regular maintenance and upkeep, there’s always a potential for an emergency repair. Residential & Commercial Plots in Umred Road, Nagpur

For example, roof damage could occur during a hurricane, or leaky pipes could ruin the kitchen floor.

So, it’s best to dedicate roughly 20 to 30 percent of your rental income to these unexpected expenses. While you may not hit half of the estimated expense, the calculation will help tailor your expectation. Plots in Umred Road, Nagpur

5. Consider a Low-Cost First Investment Property

It’s tempting to invest millions of dollars into your first investment property. However, that might not be the best strategy. 

According to real estate investment experts, it’s best to pick rental properties that lie in the lower to mid-range price bracket. Plots in Nagpur