As a self-employed individual, you might think it will be tough to buy an investment home. However, the process is similar to those with full-time jobs. Check out our latest blog to learn more!
Getting A Loan
Get Your Paperwork In Order
Many independent workers undertake preparatory steps before applying for a loan. Some opt to receive a W-2 wage rather than owner’s draws. Demonstrating stable and consistent income, preferably with progressive gains, is essential. Expect a potentially higher interest rate due to the perceived riskiness of self-employment by lenders. Occasionally, you may need to accept paying more. Maintaining a good credit standing is crucial. Address any easily rectifiable issues promptly. If there are disputes, take proactive measures by corresponding with both creditors and credit bureaus. Additionally, it’s wise to keep business and personal transactions separate from the outset. Mixing funds can lead to confusion and complicate tax matters down the line.
Reduce Your Deductions
While many business owners use all the deductions they are entitled to, this will end up decreasing your income. The lenders will want to see a high income in order to show you will be able to pay back the loan. When filing your taxes this year, consider taking a pass on some deductions you had to write off. This will help the lender see that you actually do have the income required to pay back the loan.
Save Up For That Downpayment
It’s advisable to anticipate putting down a minimum of 20% when purchasing an investment property. This requirement can represent a significant sum, depending on the property involved. Initiating savings promptly and allocating a fixed amount each month is a prudent approach. Treat your savings account as an obligatory expense akin to any other bill. Consider forgoing your annual vacation and directing any windfalls straight into your savings. If necessary, contemplate utilizing your retirement account or 401(k), but be mindful of potential penalties.
Buying Directly
Work With A Pro
When you work with a professional such as Core Real Estate Properties you will be able to purchase a fantastic investment property at a very low price. We offer off-market deals, which will save everyone time and money. Many of our buyers pay in cash, but that is not always a requirement. We work with private buyers and sellers as well as other investors to offer some of the best deals in the Fort Myers area. Working with a professional will ensure you are purchasing a high-value property at a low price. We only buy and sell the best houses in the Fort Myers area.
How To Save
Starting to save early to purchase an investment property outright is a wise strategy. Similar to saving for a down payment, accumulating enough cash to buy a house outright requires dedication. Evaluate the possibility of liquidating other assets and minimize discretionary spending. Implementing effective saving systems can expedite the process and bolster your cash reserves significantly.