What should I look out for when buying income property? Any tips? Thanks?

Question

I'm looking to buy income property out of state. I'm looking into duplexes and 4 unit apartments. Since I'm a first time investor what tips are there to this process. Are there any pitfalls that I need to avoid?

Answer 1

Look for cities with good rental economies  (i.e. college areas, military or big businesses like IBM or Dell), do city searches for rent to owner ratio, zip code crime index. Section 8 qualifications if desired, net income over rent, state tax and property tax. Lenders will also waive PMI for 20% down to cut cost. Google and compare property management companies. Decide if you have a short or long term plan. Make sure place is in move in condition. Pitfalls? If you buy in a flood area make sure foundations are high. Have enough $ if occupancy is not 100%

Answer 2

As a Realtor....

Actually you should look for a reptuable management company out of state, that will save you a ton of time and money. Also get a good inspection, make it a part of your sales contract to fix ALL major items. Get a good Realtor who specializes in commercial or income producing properties who can work through the numbers to make sure that you will make a profit on current tenants. Email me at [e-mail] if you want more tips.

Answer 3

Yes, you should look for rental returns of 1per cent perannum or two percent maximum. the dangewr is greed, if one become greedy and get maimum returns with no regards for tenanats, -they are ur boss they give u money- there will be problems for you if ur greedy, from my experience with property.