How To Buy Investment Property

Posted on: May 14, 2011

Categories: Buy, Residential House

Author: lbuen

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Buying Investment Property – What’s At Stake

Buying your first investment property can be daunting since it involves an elaborate buying decision-making process and a substantial amount of money. One wrong move could possibly lead you to losses instead of handsome returns. That is why, before making any move, it is crucial for real estate investment rookies to learn the ropes from industry mentors, real estate agents, accountants, lawyers or through research to keep mistakes at a minimum. You are lucky to be in this page since this post discusses the fundamentals on how to buy investment property.

How To Buy Investment Property 101

Plot Your Game Plan. In this business, there can be an infinite number of strategies to implement depending on how innovative an investor can be. Just remember to always opt for those which are ethical and legal. However for fledglings, let us just initially consider the primary approaches: buy and hold; buy, fix and sell (or profit, of which this website is all about), wholesaling, flipping, and renting out for cash flow. Your choice of strategy will dictate the type of property you need to invest in.

Decide on The Type of Property. The complex buying decision-making process begins. What type of investment property must you buy: handyman specials, apartment buildings, a single family home, vacant lots, condominiums, mobile homes, commercial properties, industrial properties store fronts, and what have you? These babies offer differing levels of risks and payoffs and require different game plans.

If this is your first investment, a single-family home for you to rent out or flip, or perhaps a multi-unit apartment as a source of cash flow may be a suitable choice to kick-start your real estate career. These kinds of properties potentially allow you to make a killing or could become a wellspring of regular cash flow. What makes them more preferable is that they are less regulated than mobile homes and condominiums in many areas, have shorter average vacancies as compared to industrial and commercial properties, you can obtain a good deal of information on how to buy investment property of this type.

Pick An Area. The location of a property is an important factor that can have a lot of sway in the profitability of your investment. It can dictate how much rent you can charge, for how much you can resell the property and the kind of tenants you will be taking in. Thus, it is important to make the right choice.

Your tenants must be employed to be able to pay rent monthly so consider areas with robust economic bustle with numerous employment opportunities. Good schools, shopping, transportation, and low crime rate must also be in your checklist as these attract prospective tenants. It would be great you can pick an area which is accessible from where you live so that you can conveniently and regularly check it.

To help you assess an area vis-a-vis our criteria, read the local papers and city newsletters for the previous years. This way you will get a picture of events in the locality that can influence the value of properties, such as changes in zoning, laws and land use planning. You can also discuss this with other real estate investors.

Once you locate an area satisfying these prerequisites, start your hunt for the particular property.

To recap, the question “how to buy investment property” can be answered with three words: strategy, type, and location of investment.

 How To Buy Investment Property
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