subject: Get Yourself Financially Prepared Before Buying A Miami Rental Property [print this page] There will come a point in your life when the idea of investing hits you. Like most people nearing retirement, there is still the yearning for security and sturdy financial cushion once they quit their jobs. Most people invest in real estate. They buy properties either to turn into second homes or vacation rentals. Others purchase residential complexes. If youre in the city looking for a Miami rental property, the first important consideration is your willingness and preparedness to become a landlord; and being financially prepared is of crucial importance.
Cash
Before you can buy a Miami rental property, its important to have cash ready. For investments, you have to show your lender the capacity to pay and qualification to own the property. This is why paying upfront cash as down payment is important. While its typical for lenders to ask for 20 percent down payment, this will set you back three points. But if you decide add 5 percent more, you only need to pay two points along with it.
Where to get the money
If you're thinking of buying a Miami rental property, its likely that you're already prepared financially. The majority of buyers looking for second homes or investment properties are ready to pay cash. Another option is to move your retirement funds into a self-directed IRA. This in effect will buy the property and is quite beneficial if you're willing to wait for the property to appreciate.
Gift money is also a good source of down payment. This is particularly helpful if your retirement balances have dropped over the past year and you cant use the money as down payment. By pooling with family and other investors, you can easily purchase the property and have someone to share the responsibilities as well.
Ownership
The down payment is not the only cost you need to think about before purchasing an investment property. Even after a state-licensed home inspector checked the property and confirmed its stellar condition, you still have to be prepared for the unexpected. Repairs are part and parcel of real-estate property ownership. You have to have enough assets to cover such expenses as well as maintenance.
Choosing wisely
Picking the right Miami rental property is more than just choosing the neighborhood and falling in love with the right home. It takes a lot more than walkthroughs and basic research to snag the perfect investment property. So take time to study your real estate books and research the citys different sectors that will play a major part in the profitability of your property.
