Buying your first investment property may make you feel even more an adult than purchasing the home that you live in did. An investment property is likely to be a smaller property that you use in order to fix up and sell or that you fix up and open up for tenants. Depending on where you live, if an investment property comes up within your price range, you may need to move on it quickly. No matter whether you plan to sell or rent the real estate, you should use a realtor. Here are three reasons why you need a realtor.
Determine what taxes are owed on the home
A home sale may not be as simple as it is first made out to be. Even on a home that is low in price, there may be back taxes that you will be responsible for as the new owner of the home. If you plan on paying cash for the home rather than taking out a loan, you will have a specific dollar amount that you have to work within. Have your realtor do the legwork on finding out if the price of the property is doable along given any tax issues you will have to care for.
Find out if all of the additions are legal
Sometimes homeowners will add additions to a property on their own or through the work of family and friends. Some of these homeowners will not seek out actual permits for the addition and will instead build things as they please. This typically presents a problem only when the homeowner is selling a home. Any home that you rent out or sell will need to meet proper standards by the city. If there is an addition on the home, your realtor will be able to pull up the permit information. If the addition had no permit, your realtor can let you know how to get the problem cured prior to your buying the property.
Figure out the neighborhood rental value
If you plan to rent out the home, you will need to find out the average rental cost for the neighborhood. You will also need to know how many rentals are available in the area in contrast to how many owner-occupied homes there are. If there have been any changes in your city or if there is restoration going on in your city, the values may be fluctuating. A realtor will best know what the home and rental values are in real time as well as how they have been in the past. If you are looking at making an investment, you will need to know if the neighborhood your home is in will be on an upswing or if the values are on a freefall.