Factors To Consider When Buying Investment Property San Diego

Purchasing an investment property is a big financial decision and you have to be careful when you do it. When you are investing in a property in San Diego, you will expect a good return. However expect a good return from every investment property in San Diego as not all will give you good passive income or equity gains.

Be careful and strategic

You will have to be careful and strategic when choosing an investment property san diego for purchase. Things get complicated when you are doing it for the first time because you don’t know which things to consider when purchasing a property. To help you out, we have come up with some important factors that will guide you to an appropriate investment property.

Factors To Consider

When you are deciding to purchase an investment property, you need to consider certain factors that will make the property worth your hard earned money. Here are those factors;

  • Location of the investment property

When you are purchasing an investment property San Diego you should properly assess the location. The location of the property should cater to the intention for which you are buying the property. You should think about the location first and then rest about the property. If you buy an excellent property in a wrong location, it won’t give you the yield you intend to gain in future. Always physically inspect the location and also research about the area.

  • Difference In The Down Payment Of The Property

The down payment of the investment property you are planning to buy varies greatly in San Diego. Some investment properties in the San Diego might require you to give a down payment between 1% and 10%. While some of the properties in posh locations might ask you to give a down payment of at least 15%. Your income, debt to income ratio and credit score will also play an important role when it comes to deciding how much down you will have to pay.

  • Follow The 1% Rule

You should calculate your return based on the 1% rule. The 1% rule indicates that you should get 1% return of the total asset amount as a rent from the investment property San Diego that you are buying. If you have invested $500,000, then you should at least get $5000 as a return every month. However you should expect more than this as rent and most of the investment buyers follow this rule.

  • Calculate The Expenses

When you are investing on a property, you should calculate all the expenses and fixes before putting your hard earned money. The expenses that you need to check while purchasing investment property are property tax, insurance, property management cost, fees of HOA and other miscellaneous costs. Although variable expenses and other renovation fees can be tricky to estimate, you should talk to experts to get a brief idea. Avoid going for property that incurs a lot of taxes and requires a lot of renovation costs.