When buying a new rental property, we have to take care of a few things.
To ensure we are buying a good property, we need to follow the steps.
To ensure we are ready for whatever comes, we need to collect the supporting documents.
While the previous article discussed the steps before the purchase, this step covers the escrow phase.
While in escrow
While the property is in escrow, this is your time to get ready for the closing date and the day after.
Prepare for the closing date
Insurance
You need to have your property insured on the day of closing. Make sure you either collect 2-3 quotes from insurance companies or get a quote from an insurance broker (my preferred way.)
Closing statement
You will get the closing statement a few days before closing, which holds how much you still owe. Based on it, make sure you have the remaining money ready, your bank ready to wire the funds, etc.
Final Walkthrough
Time has passed since the moment you put the property under contract and the closing date. Go tour the property to make sure it remained in the same condition.
Prepare for the day after closing
The property is soon yours, and time is money. You have to be sure to execute your post-purchase plan as soon as possible. If you planned renovations, create an excel sheet with plans of renovations, get quotes, and arrange the timeline to make sure the renovations can start as soon as possible.
Closing date
The closing date itself is exciting in a way that you get a new property, congrats! Now is the time if you didn't get the current tenant's leases.
Escrow Time - Summary
Now that we covered the steps we need to take while the property is in escrow, let's summarize and see the docs we have:
Document Type | Who Should Provide It | What is it? |
Insurance quote | Insurance company / Insurance Agent | A quote for insuring the property |
Closing Statement | Title / Lawyer | How much do you have to pay for closing |
Wire Confirmation | Bank | Confirmation you wired the remaining balance |