The Indianapolis area attracts millions of visitors every year. It is also a fast-growing city. That means that there are many attractive real estate investment opportunities in and around the city, whether you are interested in short-term or long-term rentals.

Things You Should Know When Investing in Real Estate

Before you invest in a property, you need to consider the costs that go with that investment. That way, you can fine-tune your budget and figure out what you can afford. Here are some key costs to account for.

• The mortgage itself. You will need to think about the monthly mortgage costs, including the mortgage principal and interest for the lifetime of the loan. The rates will depend on the type of loan, your qualifications, and market rates at the time.

• Your down payment and closing costs. In terms of upfront costs, you will need to make a down payment and pay your closing costs. The minimum down payment for an investment property is usually 20%.

• Repairs. A lot of the opportunity in real estate in Indiana is in purchasing fixer-uppers. You can either fix and flip them, or you can buy them as longer-term investments, repairing them and renting them out. So, you will have to budget for those preliminary repairs.

• Improvements. Just as you may need to make some initial repairs to the property, you might also want to upgrade it. A few luxury features may be the ticket to bringing renters or guests through the door.

• Fees. You will need to pay for an inspection when you are getting started, so you will have to be able to cover the fee for that. You also will have fees to pay associated with registering and licensing.

• Ongoing utilities. As the owner of the investment property, you will be responsible for making sure that it has electricity, water and other utilities. Do not forget to budget for these long-term costs.

• Ongoing maintenance and repairs. If you will own your property for years, you are going to sometimes need to maintain it or make repairs. Make sure you will be ready to budget for these costs when they come up in the future.

• Property taxes. You will need to pay property taxes on your investment property, just as you would on any other type of real estate. Keep in mind that if your property increases in value, the taxes may also go up later down the line. Also, do not forget that you will need to pay taxes on your rental income.

• HOA fees. You may need to pay fees to a homeowner’s association on the property.

• Other costs associated with the business. There may be a variety of additional costs that come with renting out your property. For example, you may have costs for screening tenants, paying a property management company, and so forth.

Invest in Indiana Real Estate with a Competitive Loan

Once you have figured out all the potential costs associated with owning an investment property, you can compare those costs to your available funds. Along with factoring in your existing funds, you can add in the revenue you expect the rental property to generate.

During your consultation, we can help walk you through the math so you can figure out your budget for purchasing a rental property. We can then connect you with a suitable investment property loan in Indianapolis or anywhere in IN. If you are ready to grow your real estate portfolio now, please give us a call today at (317) 255-0062 to schedule your investment property loan consultation.