Are you wondering if it is reasonable to invest in a second home or a rental property? With any investment, there are certain risks involved and it is vital that you research well about the inherent threats before making any decision on investment. Investing in a rental property definitely has its benefits as you get to benefit from passive income and financial stability. Below I will give you three top reasons why you should consider buying the perfect second home or rental property.

Expect Your Investment To Be Low

Real Estate is cheap and if you have a specific amount to invest, that is not too colossal, it is best to buy a second home. Although the current report from the National Association of Realtors predicts a steady increase in home prices, most real estate professionals will help you buy a home or a property at a low price through distressed sales. I advise you do your homework and know about laws and the basics involved before purchasing a rental property.

Distressed sales include houses or properties that the bank is selling at a low cost to clear its books. These are normally foreclosed, so any real estate consultant will help you locate one, so you can cut down your investment costs. If you hire the services of a good broker, chances are you may also get funding support through a real estate investment loan, especially if your budget is short. I suggest you purchase one of these distressed homes for sale to own a property at a lower market value.

Benefit From Passive Income

It is a great way to drive financial stability, especially if you buy a second home that you plan to rent out. Prices tend to rise in the real estate market; house rental rates usually increase every year. Once you invest in a distressed property, you will be able to recover your investment in it as soon as you find suitable tenants.

Get An FHA Loan & Your Residence

With a plan to buy a second home, you increase your chances of getting an FHA loan that is offered to home buyers, who have insufficient investment. Generally, you have to make at least a 20% down payment or upfront finance when purchasing a second home or rental property. Using an FHA loan, you would be able to buy this investment property for much less. It is an ideal way to fund your purchase. FHA loan normally requires potential homeowners to live in the property you wish to buy but you can get around that by purchasing a home or property with 3-4 units. Rent out the remaining units while you take up residence in one.

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