Importance of Valuation Before Buying a Property
- You need to know the market value on a long-term rental because you may have to sell it one day. There are many reasons why you may have to sell even though you may not plan too when you buy the home.
- You could have an emergency; financial, medical, relationship etc.
- You may decide you don’t like investing in rentals or you may need the money for an incredible opportunity. I want to buy 100 rental properties, but if a better opportunity comes along and I need to sell some of my rentals I will have no problem selling them for more than I bought them for.
- A great way to get money to buy more rental properties is to refinance your current properties. Almost every lender will want less than a 75% loan to value ratio on an investment property refinance. The best way to gain equity is to buy homes below market value. The more equity you have in a property, the more money will be able to take out when refinancing.
- In order to get loans on multiple rental properties you have to know a great bank and be able to convince that bank it is a good idea to invest in you.
- A bank will look at many factors when lending to investors. Most importantly they want to know the investor is in a good financial place.
- If you own 8 properties with little or no equity, that is not a good position. If you own 8 properties with 50% equity that is a great financial position to be in and a bank will be more willing to lend to you.