Olympia Real Estate Investor Education: How Do I Purchase an Investment Property?

There are often people who contact us, wanting to know how to purchase an investment property, and we are always happy to help.

For starters, you’ll need to finance your purchase. The bank will have specific requirements for borrowers who want to buy investment homes. It can be a bit harder to get approved for a mortgage when you’re buying an investment property, compared to when you’re buying a home you’ll live in, so be prepared. You may need a larger down payment and an acceptable debt to income ratio. Your lender will also want to see one or two years of tax returns and bank statements. You’ll be asked if you own other properties, and you may need to document that. The first step in purchasing an investment property is getting pre-qualified.

Next, hire a Realtor who can work with you to find the right property. If you can, look for an agent who also has property management experience. That gives you the knowledge you need in understanding what a good rental property looks like. Choosing the right investment property is critical, and a Realtor who also knows property management will be able to tell you how much rent you can collect and what kind of repairs and costs will be involved in maintaining the home. Your real estate and property management professional will know what the cap rate on the property is and what kind of return you can expect on your investment.

These are the major components in purchasing an investment property. If you have any questions or you need help choosing the right property to turn into a rental, please contact us at Capital Properties, and we’d be happy to share all of our knowledge and experience with you.