Real Estate Investing: Part 2
Let’s talk real estate…Part 2.
If you haven’t read through Part 1, go check it out first! 🙌🏻. I will be adding these posts (along with more details) to our blog as well.
1. If you choose to finance, we recommend using a company in the area you wish to invest in. (Usually it’s best to partner with smaller mortgage companies). They typically are easier to work with and many times offer solid rates.
2. Insurance A. No you cannot have a homeowner’s policy for a long term rental. I mean…people do it, but it’s a gamble. You’ll need a “landlord policy” that covers YOU as the HOMEOWNER & the TENANT on YOUR behalf as the owner.
3. Insurance B. If going the vacation home/rental route, you’ll need a vacation rental policy with up to at least 1million in coverage. People can (and will) do damage to your property. You need to be protected.
4. If self-managing your rentals, signup for Takl, Home Advisor, & Thumbtack Apps/Services. For simple tasks and some more difficult handyman tasks, these are great resources…especially if you are new to a specific area.
5. Utilize your realtor for more than just paperwork and helping find your property. Simply meaning, use them as an consultant too. Ask them if they have reliable handymen, cleaning teams, plumbers, etc. Many times they will give you names of people they trust and have done service for their own homes in the past.
6. Be careful of some realtors. When signing paperwork they will include a document to retain their services and a percentage will be owed to them (if you purchase property) even if you go with a different realtor. This is common practice, but if one has you agree to 12 months or more, I’d find a different realtor. Many times you can request to break this relationship in writing, but something to watch out for.
7. Don’t buy what you are APPROVED for, buy what you can AFFORD. This is in general but worth saying. If Cash-Flowing an investment property for passive income it will be critical to understand how your purchase price/mortgage payment comes into play when you don’t have tenants in your rental.
