Buying an investment property can sometimes seem like a daunting task, especially for starters due to the risks involved. A mistake made when buying investment properties could be quite devastating as it could cost you money and time, hence the need for proper knowledge. With the right knowledge buying properties can become quite simple even for beginners and costly mistakes could be avoided.
After checking through various investment properties and deciding on the property you desire, here are four significant steps involved in buying an investment property and becoming the new owner.
Negotiation is the point where the whole process of buying your investment property begins, it is the process of reaching an agreement with the owner or agent of the property you intend buying. Your major goal is to get a good deal for the investment property, so when negotiating It’s important to pay close attention because negotiating is not just about the property but also about the person you are negotiating with.
To ensure you get a good deal, you need to ask the right question and collect detailed information from the seller. Therefore, before you begin a negotiation, have a detailed worksheet that you would use to collect all the important information about the seller and property. This would be critical in helping you know and remember the vital information to ask for while negotiating.
Due diligence is a period where you can inspect the investment property and any related information, then call off the deal if you notice any problem. Depending on how you negotiate, this period could vary widely. Some can last for months while some will last for just 24hours.
During this period, It’s important to have not only access to the investment property but also all documents that relate to the property to fully execute due diligence.
I suggest you employ the services of a third party inspection company to assist you to examine the physical state of the property thoroughly. An examination will give you an experienced evaluation of the property as well as help you in determining the remodel costs of the property.
Now that you are confident about purchasing your investment property with the detailed information you have gained from the due diligence carried out. You immediately begin the process of buying the house and closing the deal.
You schedule closing appointment with the closing agent, then ensure you provide the purchase contract and demand for a title search. This title search is evidence that guarantees the seller truly owns the property and there is no claim over it by anyone else.
Before the scheduled date of closing, request for a copy of the documents and carefully review the following, the Title insurance binder, Deed, Closing Disclosure Statement, Financing documents, amongst other vital documents.
Closing would be quite a simple and smooth process if you took the time to prepare properly. During the closing, the closing documents would be explained to you by the closing agent and notary, then you will be required to sign the documents. However, you can also have the documents mailed to you, especially in cases of long distance.
Depending on the requirement of the closing payment, you can wire funds or issue checks to make payments. Then you would be given all the keys to the property, garage door openers, and mailbox.
Finally, ensure a copy of the insurance binder effective from that closing date is emailed to you and then confirm that the address is accurate on the policy.
When you are armed with the right information, buying an investment property can become so simple and less intimidating. I hope you found this article helpful, and I hope you would utilize the information in this article when you want to buy your next investment properties.