With historically low interest rates and lower residential property values . . . now is a great time to jump into the market. Whether or not you have owned an investment property or not, you can benefit from buying in today’s market.
Can you buy with less than 20% down payment? The short answer is, “yes!” If you can identify a HomePath or HomeSteps property you can purchase with only 10% down. What is HomePath? HomePath simply means the property is a Fannie Mae owned foreclosure. HomeSteps is Freddie Mac’s version. The catch? You cannot make an offer to purchase as an investor until after 15-days the home has been on the market. Why? The first 15-days that the home is on the market is available first to those who intend to owner-occupy–this gives the first-time home buyers and those who intend to live in a property and not rent the opportunity to compete against other buyers versus in competition with buyers and investors.
If you are looking for a long-term investment with a positive cash flow you should consider buying an investment property. It is advisable to hire a property management company and pay a customary 10% fee to manage the unique and new dynamics of being a landlord. You should also make sure you have 3-6 months of reserves (reserves are total mortgage payment, including taxes, insurance, principal and interest). This will protect you in the event the property is vacant or needs repairs completed.