There are many benefits to buy investment property but it should not be done lightly. Do your due diligence and make sure you carefully think through your investment. That’s why we’ve created this “Investment Property In Chicago area Buying Checklist” to help you.
Use this checklist as a resource if you’re buying in Chicago area, anywhere in 60453, or throughout Illinois.
Investment Property In Chicago area Buying Checklist
(For all investment properties in the 60453 zipcode area.)
What is the market you’re looking at? Look at the state, the zip code 60453, and the city. Can you buy properties affordably in those areas? What is the economy like in those areas? (For example, if you’re buying rental property, are there a lot of renters?)
Next, consider the property. What kind of property are you looking for? How will the numbers work out (i.e. can you acquire the property affordably and get a good return?) What problems tend to exist in the 60453 zipcode area. (For example, some zipcodes might be more prone to flooding; others might have unsteady ground that leads to cracked foundations… this might not stop you from buying the investment property but you should at least be aware of what the conditions are often like.) Get a general idea of your answers at first and then refine your answers once you start looking at actual properties.
Think about what you hope to get out of the property. Is there a specific cash flow number you’re looking for? What’s the frequency of payment you need? What about appreciation? As with everything else in investing, there’s sometimes some give-and-take between what you need to give and what you can get for a return, but this is a starting point for you.
Think about what your expenses will be. For most investors, you might be looking at taxes (including property tax, school tax, etc). And, depending on how the deal is structured, there will probably be income tax. You may also have other expenses, like HOA fees, insurance, or property management fees.
Every savvy investor plans for contingencies before they acquire a property. For example, they think about what would happen if they need to sell, or what would happen if they need to find a new property management company. Yes, you can spend all day thinking of contingencies but just stick with some of the main ones and prepare for them. This will give you peace of mind that you can deal with anything unexpected that may come your way.
Last, think about how you’ll protect yourself. For example, you’ll probably want a combination of a house inspection, insurance, and a corporate structure, but there might be other things, too, so make sure you talk to an attorney.
It can feel overwhelming buying an investment property but it doesn’t have to be. Use this helpful checklist to guide you through each of these 6 points and you’ll have a strong command of the situation to help you before, during, and after the acquisition.