Buying An Investment Property

Investment Properties 101: What You Need to Know Before Buying An Investment Property

Real estate investment property can do wonders for your financial future and help you build wealth and passive income. But what are the secrets to success?

investment property terms

First, assess your overall financial picture and how real estate will fit into your overall investment portfolio. Determine what type of initial financial investment you’ll make, what type of financing you’ll utilize and what your short- and long-term goals are.

Consider what the current market rents are for the property type you have in ind in your desired area. An experienced real estate agent or property appraiser should be able to help with this. You can also contact property management companies and peruse classified ads online. You can then determine what your net income on the property would be each month (also remember the tax benefits, if any) after factoring in regular and unforeseen maintenance expenses.

Determine also your long-term strategy for owning the property.

Finding a property with an opportunity for long-term equity growth and cash flow makes sense for more people than planning to buy and flip with an eye toward a fast profit.

Ask yourself these questions:

  • Would you be willing or able to break even, or potentially take a loss on the property each month, anticipating a high sales price in the future? If you’re putting the minimum amount of money down, creating lots of cash flow is more difficult.
  • Would you be able to cover the property’s expenses if you had vacancies?
  • Would you have funds to cover future improvements and repairs?
  • What type of tax benefit could you expect based on your overall financial picture?

Acquire financing

Lenders have different requirements for down payment and qualifying when you are purchasing an investment property than when you are purchasing a primary residence. And loans for 5+ units are completely different than those for 2-4 units. Have a firm grasp of what’s required for the type of property you’re seeking before you begin your search.

Mortgage lenders will typically charge a higher interest rate (one or more percent) on an investment property than on a primary residence. That’s because lenders consider investment properties a higher risk.

In calculating their risk, things that lenders look at when considering to lend on a rental property are the amount of down payment, previous landlord experience, borrower’s income and assets, and the property’s income.

Would you like to further explore the possiblity?

Whether you are considering purchasing your first investment property or an additional property to add to an existing portfolio, we’d be happy to help you find a property that matches your needs. Here are a few currently available investment properties:

No Results Found.

New Listing - 3 weeks online
$1,069,000
Single Family Home For Sale
Active
4
BED
3
TOTAL BATHS
2,891
SQFT
4650 Pepperwood Avenue
Long Beach, CA 90808
Lakewood Village (LKVL) Subdivision
New Listing - 9 hours online
$993,000
Single Family Home For Sale
Active
0.2074
ACRES
LOS ANGELES
COUNTY
4459 Pepperwood Avenue
Long Beach, CA 90808
Lakewood Village (LVD) Subdivision
New Listing - 2 weeks online
$949,900
Single Family Home For Sale
Active
4
BED
3
TOTAL BATHS
2,198
SQFT
4358 Charlemagne Avenue
Long Beach, CA 90808
Lakewood Village (LKVL) Subdivision
$945,000
Single Family Home For Sale
Active Under Contract
5
BED
4
TOTAL BATHS
2,242
SQFT
4619 Sunfield Avenue
Long Beach, CA 90808
Lakewood Village (LKVL) Subdivision
$918,900
Single Family Home For Sale
Active Under Contract
5
BED
4
TOTAL BATHS
1,890
SQFT
4240 Charlemagne Avenue
Long Beach, CA 90808
Lakewood Village (LKVL) Subdivision
New Listing - a week online
$849,999
Single Family Home For Sale
Active Under Contract
4
BED
3
TOTAL BATHS
1,924
SQFT
4544 Faculty Avenue
Long Beach, CA 90808
Lakewood Village (LKVL) Subdivision
$849,000
Single Family Home For Sale
Active
3
BED
2
TOTAL BATHS
1,888
SQFT
4822 E Arbor Road
Long Beach, CA 90808
Lakewood Village (LKVL) Subdivision
New Listing - 3 weeks online
$779,880
Single Family Home For Sale
Active Under Contract
3
BED
3
TOTAL BATHS
2,234
SQFT
4604 E Centralia Street
Long Beach, CA 90808
Lakewood Village (LVD) Subdivision
$659,000
Single Family Home For Sale
Active Under Contract
3
BED
2
TOTAL BATHS
1,238
SQFT
11425 205th Street
Lakewood, CA 90715
Lakewood Village (LKVL) Subdivision
$649,000
Single Family Home For Sale
Active Under Contract
3
BED
2
TOTAL BATHS
1,746
SQFT
4702 Montair Avenue
Long Beach, CA 90808
Lakewood Village (LKVL) Subdivision
New Listing - 2 weeks online
$638,000
Single Family Home For Sale
Active Under Contract
3
BED
1
TOTAL BATHS
1,076
SQFT
4755 Montair
Long Beach, CA 90808
Lakewood Village (LVD) Subdivision
Price Change - 6 days ago
$469,900
Condo For Sale
Active
2
BED
2
TOTAL BATHS
1,249
SQFT
5479 E Centralia Street #17
Long Beach, CA 90808
Lakewood Village (LKVL) Subdivision
New Listing - 3 weeks online
$630,000
Townhouse For Sale
Active
2
BED
3
TOTAL BATHS
1,810
SQFT
3000 E 19th Street #101
Signal Hill, CA 90755
Aragon (ARAG) Subdivision
New Listing - a week online
$489,000
Condo For Sale
Active
2
BED
3
TOTAL BATHS
1,300
SQFT
2240 N Legion Drive #207
Signal Hill, CA 90755
 
$479,000
Condo For Sale
Active
2
BED
2
TOTAL BATHS
1,032
SQFT
2575 E 19th Street #26
Signal Hill, CA 90755
Signal Hill (SH) Subdivision
$450,000
Condo For Sale
Active
2
BED
2
TOTAL BATHS
1,116
SQFT
2601 E 19th Street #14
Signal Hill, CA 90755
Pacific View Terrace (PCV) Subdivision
$445,000
Condo For Sale
Active
2
BED
2
TOTAL BATHS
1,036
SQFT
2599 Walnut Avenue #138
Signal Hill, CA 90755
Other (OTHR) Subdivision
$435,000
Condo For Sale
Active
2
BED
2
TOTAL BATHS
1,171
SQFT
2101 E 21st Street #308
Signal Hill, CA 90755
 
New Listing - 4 weeks online
$421,000
Condo For Sale
Active
2
BED
2
TOTAL BATHS
1,157
SQFT
2504 E Willow Street #205
Signal Hill, CA 90755
 
New Listing - 3 days online
$410,000
Condo For Sale
Active
2
BED
2
TOTAL BATHS
1,060
SQFT
2504 E Willow Street #210
Signal Hill, CA 90755
Willow Ridge (WD) Subdivision
$388,999
Condo For Sale
Active
2
BED
1
TOTAL BATHS
900
SQFT
2525 E 19th Street #24
Signal Hill, CA 90755
Signal Hill (SH) Subdivision
New Listing - 19 hours online
$374,900
Condo For Sale
Active
2
BED
2
TOTAL BATHS
1,159
SQFT
1460 E Willow Street #108
Signal Hill, CA 90755
Signal Hill (SH) Subdivision

 

About the Author

Shannon Jones has been selling real estate since 1998 and specializes in listing and marketing homes. She has consistently been one of the top Realtors in the Long Beach area. Prior to her award-winning career in real estate with the Shannon jones Team, Shannon has had successful careers in journalism and public relations. She holds a bachelors degree from UC Irvine and a masters degree from UC Berkeley. Shannon holds E-Pro, CDPE (Certified Distressed Property Expert), and PSC (Pre-Foreclosure Specialist) certifications. Shannon is very personable and maintains a very strong moral compass, always putting the best interest of home buyers/sellers above monetary goals. A California native, Shannon enjoys gardening, travel, reading, cooking and poker when she’s not selling homes MY DESIGNATIONS Lic# 01247705 | CDPE (Certified Distressed Property Expert) | E-Pro | PSC (Pre-Foreclosure Specialist) MY SERVICE AREAS Anaheim Bellflower Buena Park Carson Cerritos Cypress Downey Fountain Valley Garden Grove Huntington Beach La Palma Lakewood Long Beach Los Alamitos Los Angeles County Norwalk Orange County Rossmoor San Pedro Seal Beach Signal Hill South Bay Westminster

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