If you're a first-time home buyer you might be interested in something other than a traditional, single-family home. Instead, you may want to purchase an investment property. The good news is that you can do that, but you may need to be a little bit more careful about how you go about it. There are a couple of common ways it's usually done, and you can also choose a different option.
Which lender you're working with, whether you're looking for down payment assistance or other first-time home buyer credits, and other factors will all influence the options you'll have. For a lot of new buyers, the easiest path to purchase an investment property is to buy a home and live in it for a year or two. Then, buy another one and use the first one for an investment. As long as you've been in the property for the period of time your mortgage lender requires you can usually move out and use the property differently.
Another way some first-time home buyers get into investment properties is by purchasing a duplex or other multi-family property for their first home. They may live in one unit and rent the other unit(s) out, creating both a home for themselves and an investment property with the same purchase. Then, as with a single-family home purchase, they may move out after a period of time and buy another property. At that time they would rent out the unit they were originally living in.
Many times a new investor won't be able to get a loan for a property if they don't own a home of their own or have a lot of cash or other assets to back their purchase. That can be very frustrating for a first-time home buyer who is trying to break into the investment market but also wants somewhere to live. By choosing a multi-family home or buying a home and then moving out to use it for a rental later, buyers can get around these difficulties and get started on real estate investing.
If you are interested in finding and qualifying a tenant for your investment property, we offer professional tenant placement services. Having to deal with dinner time showings, canceled appointments, or worse no shows is all but good. Contact us today to learn more!
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