Buying an investment property for the first time is more exciting for some people than hunting for their family home. Watching home improvement shows, attending investment seminars and checking out houses gets the adrenaline going. But financial experts offering the best buyer, seller and investor tips point out the many challenges of buying an investment. Some first-time investors don’t realize not all homes qualify for certain loans. Also, it’s likely your lender will want to see a 20 percent down payment on an investment property. In Pinellas County, the tax appraiser expects investors to pay a higher share of property taxes since they don’t qualify for the homestead exemption. According to a piece by born2invest.com, young investors need to push forward by learning from more experienced investment property owners.

Getting the financing in order

One of the first steps is to make sure you have enough cash flow even if your tenants or guests do not pay. Work on improving your debt-to-income ratio or how much debt you carry compared to declared income on your tax returns. Check with your lender about any new financing options as well as private money lenders who help investors.

Adjusting your expectations

The first home you fix up and flip for a profit or turn into a rental home will not necessarily look as perfect as homes featured on HGTV. If you planned to run an Airbnb in Pinellas County, check with the HOA (home owner association) to find out if they permit short-term rentals. Avoid buying a home that needs too much work. Some investors pour tens of thousands into a home flip only to run out of money because of unrealistic expectations. Look for homes that only need cosmetic repairs as opposed to homes with fire damage, mildew and structural problems.

Talk to experienced home flippers and investors about their greatest challenges. Even if some have earned $80,000 on a home flip, your profits might start smaller. With each investment, take the lessons to heart to boost not only profits but quality in the future.

When it’s time to go to closing, rely on an experienced title company. At International Title Partners, we have worked with new and experienced investors as well as people buying their personal residences. For more buyer, seller and investor tips for real estate in Pinellas County, please contact us.