The document outlines a 10 step checklist for buying an investment property. It discusses assessing financial and personal goals, determining if you have the skills to be a landlord, choosing a location and property type, securing financing, making an offer, and inspecting the property. Key steps include evaluating your investment objectives and timeline, understanding responsibilities of being a landlord, and performing due diligence before finalizing a purchase.

1. The 10 Step Checklist
For Buying an
Investment Property
http://michaelputnam.com/

2. Investment Property Checklist
Investment properties are fast becoming the most
popular form of investment, with purchases rising
over 25% in the last 5 years. It makes sense, since
more savvy investors are looking to diversify their
holdings to ride out the increasing financial swings.
Maybe you’ve decided it’s time for you to join this
group of savvy investors and buy an investment
property of your own, but you’re not sure where to
start., This 10 step checklist will help you make the
right decision.
http://michaelputnam.com/

3. What Is an Investment Property?
An investment property is a house, condo, commercial
site etc. purchased for the purpose of generating income.
Since you don’t normally live in your investment, it’s
neither your current primary residence nor a vacation
home for tax purposes. If you’re an investment property
owner, you’re potentially a landlord – managing or
overseeing the rental of the property to a tenant who
pays you to live there. If it’s not purchased for renting, it
might be your intention to renovate and resell for profit.
Investment properties can provide flexibility and
variations for profit potential, including:
http://michaelputnam.com/

4. • Double The Profit Potential: An investment
property offers two main ways for you to
achieve financial gain: rent that can provide on-
going income; and appreciation in capital value
that can result in a profit when the property is
sold. There may also be tax advantages
available, depending on your financial profile.
(Make sure you consult a tax professional for
advice.)
• Potentially Little Or No Money Down:
Depending on your lender, it’s possible to
become a property investor with a relatively
small amount of out-of-pocket money. Among
your financing options you may find loans
requiring little or no money down. There are
even options that let you use the equity from
your current home to purchase your investment
property.
Becoming a property investor is a big decision to
make, and it will require diligence, commitment,
and an understanding that, for the most part, it’s a
long haul. To get you up to speed, read the checklist
below.
http://michaelputnam.com/

5. The 10 Step Checklist
1. Assess Your Financial Goals
Before you dive in and buy an investment property it’s important to assess
where you want your financial future to head. Investing in property can be a
powerful wealth-building tool, but it can also be a burden if not done right.
The first and most critical step is to be in control of your finances and have an
overall plan for your financial future. Once you’ve got that, then you can
accurately assess if investing in property is a good strategy for you. If you’re
new to financial planning it may be worth talking to a real estate attorney and
accountant, and cultivating relationships with these advisors. If you choose
wisely they’ll be a valuable resource throughout your investing career.
To start off, try asking yourself:
• What investments do I currently have, and what do I want to acquire in the
future?
• Do I have retirement savings?
• Will liquidity be an issue for me? Do I need fast access to cash?
• Will I be able to be in this long-term, and be comfortable with an
unpredictable cash flow?
• Do I expect my investment property to supplement my retirement?
• Do I expect the property to provide income, or do I want long-term capital
gains?http://michaelputnam.com/

6. The 10 Step Checklist Contd..
2. Assess Your Personal Goals
Owning and maintaining an investment property is a large
commitment to undertake, and it’s a decision that needs to work
with your personal goals and ideals for your future. There are
many professionals, such as life coaches and counsellors, that
can help you figure out what your ideal lifestyle might look like,
but try asking yourself the following as a start:
• Where do you want to be in 2, 5, 10 years?
• Where is your ideal location to live?
• Do you want to start a family?
• Do you want to travel? Do you want to have a solid base for a
family?
• Are you satisfied with your career(s), or do you see a big
change in the future?
• Are you comfortable with the idea of commitment and the
responsibility of maintaining another asset?
http://michaelputnam.com/

7. The 10 Step Checklist Contd..
3. Ask Yourself: Are You Landlord Material?
Owning an investment property may require you to
play an active role in management of your tenants.
Consider the possibility that you may have 3 a.m.
emergency phone calls to answer, late rent to collect,
evictions to process, paperwork to keep up with,
repairs and maintenance and additional tax
paperwork to be done come tax time. Investment
property is a major commitment and you need to be
fully aware of the responsibilities and obligations
you’ll need to abide by. Remember, there are always
professionals that you can hire to give you a helping
hand – for a price.
http://michaelputnam.com/

8. The 10 Step Checklist Contd..
4. Consider a Management Company
If you’re planning to manage your investment
property from afar, or you predict that you’ll be too
busy to handle the extra work your investment will
inevitably involve, then a property manager may be a
good solution for you. Acting as a third-party, a
property manager will run your investment like a
business, collecting rent, doing the bookkeeping,
coordinating repairs and dealing with the
inconvenient 3 a.m. phone calls. A good property
manager will cost in the range of 5% to 10% of your
gross rental income; more if additional services are
required. You’ll need to weigh up the cost vs. the
potential stress-free operation of your investment –
which could make the additional price a bargain.
http://michaelputnam.com/

9. The 10 Step Checklist Contd..
5. Determine Your Borrowing Capacity
You’ve decided to take the leap and join savvy
investors in the purchase of your first (or
second, or even third) investment property, so
unless you’ve got significant cash in the bank
it’s time to head on down and see what sort of
investment you’re able to afford. Financial
institutions have stringent criteria for issuing
loans, especially after the financial crisis of
2008, so it’s wise to check just what you can
borrow before making a spontaneous offer to
a property agent.
http://michaelputnam.com/

10. The 10 Step Checklist Contd..
6. Choosing The Right Location
Once you’ve got your finances approved, it’s time to choose a
location that is both affordable and a smart investment choice.
Although you can buy virtually anywhere, you need to consider
whether you’re comfortable being an absentee landlord –
managing a property thousands of miles away – or if staying local
to keep a watchful eye is more your style. Once you’ve determined
that, some location-dependent factors to consider before making
an offer might be:
• Services: What services are close by that may increase the
desirability of your property for renters or future buyers?
Health, shopping, employment etc.
• Schools: Many renters and buyers look for the availability of
schooling for their future family. What does your potential
investment offer in terms of schooling?
• Transport: Access to transport is becoming more of a
consideration. Is parking available? Are there busses or trains
close-by? How easy is it to get to an airport? Is the airport
domestic or international?
• Desirability: How desirable is the location? Are the streets lined
with trees? Are the yards well kept? Is it a newer or older
neighborhood? Is it busy, or peaceful?
http://michaelputnam.com/

11. The 10 Step Checklist Contd..
7. Choose Your Property Wisely
If you’re going into property investing remember that your main reason for buying
is to make money. Keep that goal in mind at all times and give yourself every
advantage to achieve this goal. You should also take the following into account:
• Stay clear of areas where property prices are at their peak. Generally, these
offer a lower rate of return. Instead try to find a property in an up-and-coming
area. A property agent will likely be able to help you out.
• Focus on your main investment variables: the purchase price, rental income,
and potential profit. Don’t make the mistake of getting emotionally involved in
the deal. You won’t be living in the home, so forget the room layouts or carpet
color.
• Look into distressed properties that have been returned to lenders (banks and
mortgage companies) after foreclosures. There are great deals to be had here.
• Determine how much you can get for rent on a potential property. As a start
check out the U.S. Department of Housing and Urban Development Web site.
They offer fair Market Rental Rate statistics that break down average rentals
for metropolitan areas across the United States. Alternatively, look at the “For
Rent” section of local newspapers and property magazines in the area of your
proposed investment. You’ll be able to get a general idea of market conditions
there.http://michaelputnam.com/

12. The 10 Step Checklist Contd..
8. Secure Your Finance
Securing your finance will enable your investment dreams to come to
fruition, and unless you’re in the banking industry, you’re best off
finding an experienced mortgage consultant to become a valuable
part of your team. Home mortgage consultants are trained to ask
questions that uncover a clear understanding of your investment
goals, which they can use to make recommendations for your wealth
building potential. Here are just a few of the solutions that may be
available to you:
• Home Equity Financing: Allows you to leverage the equity in your
primary residence to purchase an investment property. You may
be able to borrow up to 100% of your current home’s unused
equity.
• Renovation Financing: A single loan that covers both the purchase
price of an unrenovated property plus the costs of renovation. The
loan amount is based on the estimated value of the property after
your improvements.
• Low Down Payment/No Down Payment: Allow you to purchase a
property with little cash out of pocket.
• No Doc/Limited Doc: Lending options for the self-employed.
http://michaelputnam.com/

13. The 10 Step Checklist Contd..
9. Make An Offer
Once you’ve found a place and received the “green
light” from your lender, it’s time to cement your
commitment to an investment property and make
an offer. It’s advised you consult a property agent,
and even employ their expert services to do the
negotiation on your behalf. Negotiating a deal for
investment property is an art, and unless you’ve
got the background knowledge of the market, then
you could be sabotaging the value of your
investment. Sometimes it’s worth paying a fee to
get a better.
http://michaelputnam.com/

14. The 10 Step Checklist Contd..
10. Get Your Investment Checked Over
If your offer gets accepted be sure to include a clause in
the contract to have the sale conditional on the
property passing a building inspection. All too often
property condition is assessed at face value – what’s on
the walls, and what looks good to the naked eye. In the
greater scheme of property investing, it’s what’s behind
the walls that counts. Are there termites? Is there
rotting of the frame? Are the foundations structurally
secure? These are all answers that need to be
answered by a qualified professional.
http://michaelputnam.com/

15. Signed, Sealed, and Delivered
Making the move to property investing is
a significant decision to make, and one
that will inevitably bring changes to your
personal and financial future. It’s up to
you to perform the due-diligence and
ensure that this change is a positive one,
and complements the vision for your
future. Using this 10 step checklist will
ensure that you’ve got all your boxes
ticked when buying an investment
property, and may even prevent you
from making irreversible decisions that
you could regret in future.
http://michaelputnam.com/

16. Website: http://michaelputnam.com/
Michael Putnam
info@michaelputnam.com
703-928-6514
References:
• http://michaelputnam.com/10-step-checklist-buying-investment-property/
• http://www.alpinepdx.com/pdf/Checklist-Buying-RentalProp.pdf
• https://www.locationshawaii.com/pdf/InvestmentPropertyGuide.pdf