To buy rental property, create a professional team, do market research, sort out your finances, and get pre-approved by a lender. Write an offer, and inspect the building before closing. Finally, complete the loan application process, and make the payment for the property.
- Create a professional team
Build a team composed of a real estate agent, investment property lender, third-party manager, attorney and property inspector.
- Do market research
Research the market you wish to invest in. Survey the neighborhood to determine its average rent levels, crime rates and market demographic.
- Sort out your finances
Transfer your down payment funds to an accessible source, such as a money market, savings account or checking account. Make sure you can easily access at least 30 percent of the property value. This amount covers reserve requirements, down payment and closing costs.
- Get pre-approved
Apply for a loan, and provide bank statements and tax returns. Strong credit improves your chances of finding a lender. Having at least 20 percent of the property value also improves your chances.
- Write an offer
Prepare a reasonable offer on a rental property. Factor in property tax, management fees, repairs and insurance.
- Inspect the building
Hire a professional to inspect the building before making the purchase.
- Complete the loan application
Enlist an appraiser to examine the value of the property, and then finalize the loan application.
- Make the payment
Have your lender wire the necessary mortgage funds, and receive legal ownership of the property upon closing.