If you are new to the world of investing in income property, here are a few things you must know before you begin your search:
- Loan Pre Apprvoal
You do not want to waste your time looking in a price range you do not qualify for. Or, you might qualify for more than you thought. A pre approval lets you know what your purchase power is.
- Submitting An Offer
Having your pre approval when submitting an offer lets the seller know that you are a serious buyer and ready to go. If a seller receives multiple offers, they tend to dismiss the offers with no pre approval. Cash is usually king in real estate but a pre approval and a good down payment is the next best thing.
- Research the Area
Drive around different to areas or cities to narrow down which areas you would like to own in.
- CAP Rates
Many newer investors think that the CAP Rate is the only thing that matters. This usually only matters when you are buying cash. You will usually get a higher CAP Rate in areas that are less desirable. For instance, coastal cities usually have a lower CAP Rate because the properties are worth more near the beach.