Before you part with most of your savings for an investment property, make sure you have a tax advisor, one who preferably has had experience in similar real estate matters. Keep in mind, when buying a property as an investment consider that the rent roll can change at any time. You should always factor in the possibility for sudden tenant vacancy, which could put you in a negative cash flow situation if you are depending on rent to cover your mortgage. It is also very important for an attorney to do a title search and history, and you must have an engineer thorougly inspect the property and make sure you know about any potential major and costly repairs that need to be done, or if there has been any serious water damage or structural issues that can compromise your investment. Zoning changes/updates and possible easements are important to know, as are new area developments and nearby construction that can sometimes cause appreciation or depreciation of nearby properties. Above all, get comparables for similar properties that have sold in the neighborhood.
Apparently you would be parting with $120,000 as dp, which is a substantial amount to risk if it is most of your savings. Please consider carefully, and get advice from a competent accountant and attorney you trust. If you need a referral feel free to give us a call.
If you have any questions, please call David at 917-593-4068 or Bonnie at 646-318-5031.
Bonnie Chernin & David Rogoff
Fillmore Real Estate
2926 Avenue J
Brooklyn NY 11230
917-593-4068 (David Mobile)
646-318-5031 (Bonnie Mobile)