Should You Opt For House Investors When Selling Your House?

Posted on: June 24, 2012

Categories: How To Sell

Author: Buy Fix and Profit (Guest)

In selling your old house, you may have three options – sell your house all by yourself, sell your house through a real estate agent, or sell the house through house investors. Whatever the case, finding a buyer who is willing to pay the greatest amount for your property is always the main goal.

If you choose to sell your house all by yourself, you can post it on the internet yourself, on newspapers, or get leads from friends and families for potential buyers. If your house happens to be old, unattractive and in need of repairs, it may be quite difficult to sell it. Additionally, having it advertised on newspapers and the like may be costly.

Your second option is to sell your house through a real estate broker. Although people conventionally choose real estate agents to sell their properties, there are setbacks to this option. First of all, real estate agents cannot assure you when your property will get sold. Plus, if the house is too old and not that presentable, your real estate broker may have a hard time selling it, again, another wasted time. If your house finally gets sold, a portion of the sale will have to go to the broker, cutting in on your profits.

FSBO Should You Opt For House Investors When Selling Your House?

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Your third option is selling through house investors. House investors are in the business of buying houses and reselling at a higher price for a profit. They usually accept houses in any condition as long as they can buy it at a low price. They handle all the repairs and gain profit from it by reselling it. The investor’s goal is to negotiate the house for sale at the minimum amount possible, while your goal as the house owner, should be to accept offers as close to market value as possible.

How To Screen House Investors

No one wants to deal with fly by night investors so here are a few tips that will help you to find the right investment company.

Credentials

You may want to find out the answers to the questions: How long have they been in business? Are they a member of the Better Business Bureau? Do they have any proof that they have ever purchased a house before?

Liquidity

Serious house investors have cash and should be able to buy your house in 7-15 days. If they say they need more time, this means they may not have the cash to buy your house and is capitalizing on your house to resell it to a bigger investor. That is fine but the problem is, if they can’t sell it, they will simply back out of the deal.

Transparency

Some investors just want you to sign a contract without explaining what they plan to do. This is because they are hiding something. Legitimate and respectable house investors observe a certain code of ethics and would take the time to explain the entire purchase process to you.

Anyone selling his or her home would want to find as many house investors as possible so that he or she can select the best offer.

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Top Investment Property Advice You Shouldn’t Forget

Posted on: June 15, 2012

Categories: Buy, Property Management

Author: Buy Fix and Profit (Guest)

Getting in real estate investing may sound easy, you just have to find a property, come up with financing to buy the property and have it flipped or rented out. It’s that easy, right? Sorry to burst your bubble, but no, it is not. Investing in real estate, just like any other investments, require careful study and mastery. It is like a craft that you need to master in order to be successful in it, it’s not like you buy something one day and forget about it the next. It is after all, your investment; you bought it with big amount of money, so you also need to invest a lot of time studying it. Learning while you’re at it is the key to succeeding in this field. Like in any other business, finding investment property advice that you can follow, test and practice is essential.

Seeking Advice Top Investment Property Advice You Shouldn’t Forget

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Investment Property Advice – Before You Buy a Property

There are lots of advices that are offered around, such as tips on how to buy a property and where to get it. More than these things, you should learn what attitude you need to have and what you need to look for before you actually make an investment.

Think of it as a business. You do not decide to invest just for the sake of doing it. Because you are going to spend money, resources and time when buying a property and maintaining it, you should take it seriously. Think of it as a long-term business because real estate investing will really take time. Prepare to be patient.

Buy a property that is below the current market value. The most common mistake that new investors make is buying a property because they are speculating that it will go up in value sometime in the future. When buying, remember to check the current market value of properties in the area you are scouting, then make sure to offer an amount much lesser than that, so that whatever happens, you know that you can have a return of investment, albeit just a small amount.

Choose the best location. Best means that the place is close to schools, hospitals and transportation links. These places are appealing to tenants because of its accessibility.

Never fall in love with a property. Do not think of the property as your second home. It is an investment and that’s it. Check what tenants will like and do not choose based on your emotions.

Investment Property Advice – When Managing Your Property

After buying your first ever investment property, learning and studying continues, so here are some tips that can help you in managing your investment.

Ask a professional to be your on-call repairman. You may have a neighbor who knows how to do simple house repairs, ask him if he could do some stuff for you in case you will need it. If you want to do it yourself then that will help you save money too. In this case, you can ensure that you fix a problem fast so that the damage will not get bigger.

Ask tenants for reference. This one is very important. If you could ask them to give you their previous landlord’s contact information, then that will be best. You will know if the tenant is low maintenance or high maintenance, and if they regularly complain. It is also a good way of knowing whether they could take care of your property real well and if they pay the rent on time.

Ask for maintenance and repair deposit. As long as you properly explain the reason for asking this deposit, the tenant will not have any issues complying with it. This will ensure that the tenant will take good care of your property, or if they don’t, then you would still have money to repair whatever will be damaged.

Get professional help. For some, hiring a property manager or property management company is an expense. Yes, their services are sometimes expensive, but if you are experiencing problems like high turnover rate and damaged properties, then you might find it worth the money to hire someone to help you.

Given all these advice, you will know that owning a property for investment purposes is not a piece of cake. It requires dedication, perseverance and good public relation, not to mention, you must have the right attitude in order to succeed. There are lots of investment property tips that you can read from blogs, newspapers and books, or hear from friends who are seasoned investors, but if you don’t do them, it won’t help you at all.

Go ahead, read up and ask for investment property advice, and then make sure you apply them and test them, and soon enough, you too will be able to give out advice to new investors.

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5 Things a Rental Property Mortgage Calculator Can Do For You

Posted on: June 1, 2012

Categories: Buy, Profit

Author: Buy Fix and Profit (Guest)

Transitional housing is in such demand these days that investing in rental property makes it sound like a good and stable way to earn. However, purchasing such properties are no doubt expensive that it usually requires loans and mortgages. With several loan options readily available for you as an investor, the problem now is choosing the perfect loan to suit your needs. And unless you use a rental property mortgage calculator, the initial process alone of computing can be daunting.

Understanding How A Rental Property Mortgage Calculator Works

It is important to understand the basic features of loan calculators and what it can do for you.

1. Determines Your Loan Balance

Mortgage calculators can help you determine any balance that remains from existing loans. This will help you understand the exact nature and extent of your current financial liability. Additionally, this calculation will ensure that both you and the lender are clear as to how much loan you can avail.

Rental Property Mortgage Calculator 5 Things a Rental Property Mortgage Calculator Can Do For You

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2. Calculates Your Interest Rate

Mortgage calculators help you calculate the relevant interest rate that is applicable on your loan. Also, you can actually calculate installments based on different interest rates that are applicable on the loan at different times.

3. Calculates Your Number of Installments

Another feature of a rental property mortgage calculator is that it helps you understand the exact number of installments that you have to pay, including the exact amount of each installment. This knowledge is extremely essential to those operating on a budget, because it allows them to plan their financial liabilities.

4. Calculates Your Total Number Of Installments For Repayment

Mortgage calculators are also fitted with a feature that helps you calculate the total number of installments that you need to pay to completely repay the loan.

5. Estimates your routine mortgage payments, upkeep costs, tax and income

This feature makes it easy for you to work out the profitability of your rental property.

With the demand for rental property continuing, it is impossible not to overstate the value of a rental property mortgage calculator to investors.

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Working An Investment Property Mortgage Calculator To Your Advantage

Posted on: May 27, 2012

Categories: Buy, Profit

Author: Buy Fix and Profit (Guest)

Property investment is exciting and can bring financial rewards. While any investment property is a potential profit-earner, being able to determine if it is going to be profitable or not is crucial. No one wants to invest in a piece of property that keeps you losing money each month because the property expenses are more than what it’s gaining. So, the best way to evaluate your potential investment property is through the use of an investment property mortgage calculator.

investment property mortgage calculator Working An Investment Property Mortgage Calculator To Your Advantage

Photo Courtesy of Dale Dugdale of rentvine.com via Flickr

An investment property mortgage calculator can assist you in the following ways:

  • It can show you the many probable outcomes of your investment
  • It can provide you a fair financial analysis of your potential investments through the use of complex mathematical equations
  • It can show you your routine mortgage and upkeep costs
  • It can give you an idea of your income and tax considerations for the property

How does an investment property mortgage calculator work?

As said, an investment property calculator is a great tool for determining if your potential investment property will be profitable so you no longer have to rely on generic market forecasts or realty market experts or even go by your hunch. This is because mortgage investment calculator software are designed to process complex mathematical calculations. It processes both positive and negative values of your property such as income, taxes, and payments to even determine how much rent you will need to charge your tenants. Of course, you will need to input some important information in order for the calculator to be able to run you a result. These bits of information include:

  • Your monthly rental income
  • Your monthly loan repayment costs associated with any financing you have on the property
  • Your operating expenses in maintaining the property each month

From all of the information you have entered, the calculator will then give you rough estimates of your:

  • Monthly cash flow
  • Annual building tax deductions
  • Any changes in the amount of taxes you will be paying on the property

Limitations of an investment property mortgage calculator

Some limitations of mortgage calculators you need to be aware of is that most calculators assume that your expenses are the same each month over any given year, which is not the actual case. For instance, if you’ve made some improvements on the property on a certain month, naturally the figures would be inaccurate because the expenses would not reflect unless you manually enter it. So obviously, you must update data as well to ensure accurate results.

It is important to understand that while an investment property mortgage calculator can be a very valuable tool for you to use, it does have some limitations such that mortgage calculators would not see any rebates you might receive, or any tax deductions which you may be eligible to claim. Again, calculators are simply tools that depend on human intervention in order to process information. As always, consulting with professional tax accountants when necessary will be another option.

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How Should I Buy An Investment Property Wisely

Posted on: April 27, 2012

Categories: Buy, Things To Consider

Author: Buy Fix and Profit (Guest)

should i buy an investment property How Should I Buy An Investment Property Wisely

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New Year, new goals, new projects, despite tough economic times, it seems that the question, “should I buy an investment property?”, manage to cross the  minds of many. The USA, being an enormous country, generates a GDP of $14 trillion, the highest in the world, representing 23% of the world’s wealth. This huge diversity of people and geography offers a wide range of investment opportunities for millions of Americans – from duplex homes to inner city condos to vacation properties. Indeed, with so many roads to real estate wealth that presents itself, there are several things to consider before jumping into the property investment bandwagon. One thing that’s certain, though, is that you need to learn the things involved in property investment so that you can surely be confident when the ripe time to invest comes.

Should I Buy An Investment Property?  A Few Good Tips and Advice

Many people have fallen into the real estate trap for the wrong beliefs. A lot of people have this notion that nearly any property is an investment, but this unfortunately, is not the case.  Never ever make the mistake of thinking that all properties will be worth more than their value in a few years. To avoid this, try and follow some simple steps that will help you lead towards a real good investment.

>Never be in a hurry to purchase any kind of investment property. Take your time to find a property that meets the criteria of a good investment property. Remember, a good investment can turn into a lucrative venture, while a bad investment will lead you into a money trap. If you aren’t sure about investing in a property at all, ask help from knowledgeable real estate agent.

>Above anything else, think about the location of the property before you buy it. The property that you are considering should be located in an area, or at least relatively close to an area that has a lot of job opportunities including schools, shopping malls, and transportation.

>A safe neighborhood is one of the most important considerations that makes a property a sought-after property. If you are going to purchase a rental property, find out what the going rental rate is within that neighborhood.

>Find out how landlords in the area are doing with the current market by speaking to them. This is the best way to gather information.

Should I Buy An Investment Property Now?

Venturing into property investment requires a significant amount of money. This is why you have to discern when a good time to purchase an investment property is. But how do you determine profitability? A helpful starting point to decide if investing in property in the United States are:

1. Market Maturity
The US is a highly developed country with a mature market with world class communications, finance and property sectors. Real estate prices are also virtually on an all-time low. Just make sure that the price of the property you purchase would not further go down.

2. Language Advantage
English is considered the most spoken language so that communicating will not be a problem.  This is an important aspect for investors.

3. Well developed property laws
United States, being a first world country have clear, well developed property laws.

4. Easy to buy and sell property
Laws and customs are in place for property transactions so that buying and selling can often be done in one day; offering an opportunity for profit in short timescales.

5. Lower tax rates
The US government is generous to business owners so that tax rates are lower compared to other countries.

Should I buy an investment property? The decision ultimately lies with you. One thing certain though is that it is important to examine any potential investment property closely before making the decision to buy, because although tough economic times means more opportunities, it also means more risks as well.

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Where To Buy Investment Property – Key Factors To Consider

Posted on: April 22, 2012

Categories: Buy, Things To Consider

Author: Buy Fix and Profit (Guest)

where to buy investment property Where To Buy Investment Property   Key Factors To Consider

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It’s amazing how countless people are searching where to buy investment property despite the economy still struggling to recover. Real estate has always been, and will continue to be, one of the best ways to building one’s net worth.  However, where to buy investment property is the big question. Fortunately, there are various destinations across the globe that offers excellent opportunities.

One of the first things you need to do before buying your property is to gauge whether there is a market for your choice of property in your location. Again, location is crucial. Never buy property in an area where there is little or no perceived demand. Secondly, you must consider your overall goals when you think about what type of property you should purchase. If you’re a beginner in real estate investing, start out small.  A basic local rental in a single family home will help you understand what it’s all about and give you an idea of how to own and manage one.

Identifying Where To Buy Investment Property

With so many places touted as being property hot spots, it is imperative that you do research before making any decisions as it can be confusing to discern junk from the real facts. There are a few main basic factors that help you determine whether a property possesses the features that would make it a good investment or not. Firstly, imagine yourself living in it. If you could never see yourself living in it, no one else will. Secondly, is it practical? How is the property laid out, the size of the bedrooms and other features?  How close is it to amenities? What are the major means of transport? How far is it from employment hubs?  Another question you initially might want to ask yourself is, “What areas are identified as being a good place to buy an investment property?”. Below are a few tips to choosing the good investment property locations:

>Upcoming locations

Look for suburbs which have already boomed. Surrounding areas in these suburbs are going to boom in the near future.

>Built up locations

These are the areas where people want to live as it is close to work. Properties with developments for a new shopping complex, or those with or close to transport networks are most likely to go up in value in time.

>Popular locations

These are areas that are close to the beach, the city or other cultural hubs. You won’t find it hard to rent it out because people want to live here.

Where To Buy Investment Property Based On Location and Your Long-Term Plans

Depending on your long-term plans, your location needs may vary considerably.

Quick-sale Properties

A lot of investors profit by flipping properties. If your property investment goal is to buy and sell your way to profit, choose a location that you believe is on the verge of a boom.

Consistent Rent-generator Properties

If your goals are to generate a steady stream of rental income without ever having to exert too much effort to search for tenants, consider buying properties near universities or close to the city. College students provide a constant source for renters who want to live nearby but are not in a position to buy.

Gamble Properties with Potential

These are locations that usually begin as rough areas but possess the potential to become high-value areas over a longer period of time – all it needs is a little makeover. However, the downside is that sometimes these areas remain in the plunge forever.

Sure Ball Properties

These are properties that remain steady assets and are sure to grow and retain its value over time. However, paying a big premium is always the price you have to pay for an investment that is safe, but once into that area, stay in.

The decision where to buy investment property is never to be taken lightly.  But sound property investment advice, good research and luck will lead you to rewards.

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Tips on Finding the Best Place to Buy Investment Property

Posted on: April 13, 2012

Categories: Other Articles, Things To Consider

Author: Buy Fix and Profit (Guest)

Most people know that investing in a property is a nice way to earn passive income or accumulate wealth. Even if there are times when the real estate market is suffering from economic crisis, this investment method remains the best way to reach your financial goals. However, we must admit that there are some who do not succeed in this territory because of a number of factors. One of the most common reason is failing to get a property in the right location. Read on to know where the best place to buy investment property is.

Remember These Before Looking for the Best Place to Buy Investment Property3887491467 ae7cc04b51 300x203 Tips on Finding the Best Place to Buy Investment Property

Location, business and investment gurus say, is the key in knowing whether a business is going to succeed. Whether it is a store or rental property, you should be at the right place in order to ensure your profit. There are some other things to remember though, some things you need to do first even before you look for that perfect place where you can invest your money on. These things are not to be taken for granted, without these you won’t even get close to “looking for the best place” part.

  • Check your knowledge. What type of property are you knowledgeable in? Do you know about operating a vacation home? Do you know about managing an apartment building, or at least know someone who can help you with it? You should have ample knowledge on the real estate niche you’d like to focus on.
  • Research. Whether you are going to flip a property or rent it out, you should do your research. How much are the properties in certain places? What is the fair market value of the property you are considering? How much profit can you expect? Do the numbers. Be sure or at least have an idea if a property will help you rake in income or not.
  • Be ready. Well, this means to expect to do a lot of things. Buying an investment property requires a lot of work. You have to make a lot of calls, make several offers, send counter-offers and haggle. Be prepared for some expenses like gas and time, as you really need to expend some money and some resources even if you’re still starting out with the process.

The Best Place to Buy Investment Property

All countries have prime spots. These are places where it is good to buy investment properties. All these places though, have their own weaknesses and strengths. Manhattan, New York for example, is a good place to buy investment properties because businesses and offices are all over the city, which means that a boatload of people want to live there to get a career. However, the city is too crowded with buildings that you can only invest on condominiums and apartment buildings. So, if you want a vacation house or villa, you should look elsewhere.

There are people who like peace and quiet. If you want this market, then look somewhere that offers a peaceful environment. You should remember that in choosing a location, you should think of the market you want to serve. You can also think of your personal preference, because chances are, you are to attract the same type of people to rent or buy from you. Do you want a quiet neighborhood? Then a family may also be looking for one like that. Do you like a tropical climate? Then lots of people may also want the same.

You should also study your goals before you look for that perfect place. Actually, the best place where you can buy an investment property can be patterned with your goals. Do you intend to have a vacation rental home? Then a single-family home near the beach or a villa in Florida may be what you’re looking for. If you want to have a long-term rental property, then consider buying an apartment building or townhouse. If you’ve just started out with this venture, think of starting out small. Buy one property first and see if it will bring you profit. If not or you’re just breaking even then try out another location.

When you want to know the best place to buy investment property, remember the other factors mentioned above are also important and should not be taken for granted, as they can also make or break your real estate investment goals.

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How To Buy Investment Properties And Turn Them Into Profitable Assets

Posted on: April 10, 2012

Categories: Buy, Profit, Property Management, Things To Consider

Author: Buy Fix and Profit (Guest)

Buying investment property has long been discovered as a lucrative means to earn.  In fact, property investment is now a favorite strategy utilized by many savvy investors looking to strengthen resources when retirement comes. However, it is not easy and in order to be successful in the field, one must learn the right strategies on how to buy investment properties. Making sound business decisions is crucial too, including having the capability to manage your property and mortgage issues carefully and developing good taxation planning.

How To Buy Investment Properties -An Aspiring Investor’s Guide

Property investment provides many ways to earn large amounts of money. However, getting into property investment can be overwhelming to a new or aspiring real estate investor so that you need specific strategies to be assured of good returns and profit. A few investment strategies to consider are:

Wholesaling
Wholesaling deals typically bring in a profit of $3000 to $10,000 per deal. How it works? The investor  looks for a bargain property. For instance, the property is worth 100k but the seller only wants 70k.  You would then find a buyer for the property at 75k.  You send the assignment to your buyer, have them sign it and then send the seller the contract assignment to be signed. You walk away with 5k without putting any of your own money at risk.

Buy and Hold
If making passive income is of interest to you, this is one real estate investment strategy you should pursue. How this works? An investor acquires a property, make the needed repairs and then rent the property out for income. As the property increases in value, this gives the investor the opportunity to largely profit aside from the stream of income coming from the rent.

Buy, Fix, & Flip
Another way to earn big profits is through “buy, fix, and flip” strategy. This involves purchasing a property at a discount, making small improvements to the property,  then reselling the property at a profit. This provides investors the opportunity to earn large sums of money, typically $25k, in a short period of time.

How to Buy Investment Properties Checklist

how to buy investment properties How To Buy Investment Properties And Turn Them Into Profitable Assets

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Getting into the investment property business is quite a complicated task and you must be aware of the rules of the game, your competitors, and the market trends. Most importantly, you must do a self-assessment of what your expectations are as an investor, how much you expect to earn from your investment and most importantly, how much time you can devote to the task. Finding answers to these questions is a good way to start as well as heeding some expert advice such as:

Choosing an ideal location
You can expect quality tenants only if the area has all the civic amenities. The location should also promise safety and security. Look for an area with diverse economic base with lots of business opportunities including a transportation network.

Seeking expert help
There are never any guarantees no matter how good an investment may look. If you’re a novice in this field, you may want to take the worry off your mind and seek expert advice from specialist investment companies that are highly regulated by financial services legislation and offer a well researched advice.

Doing some homework
Sometimes, some properties may look good on the surface. It always pays to do research pertaining to the property values, rent, tax policies and the like.

Inspecting the property
It is imperative on your part to inspect the property in details. Analyze if the property is potentially promising and whether you can reap the maximum benefits from it. Analyze certain details like the seller’s motivation, the expenses that you may have to meet, the rental charge of the property, etc.

Property investment is a financial journey, but in order for you to get to our financial destination,  you need to be an informed investor – someone who knows  which investment strategy is right for you, someone who trusts his or her own judgment especially on how to buy investment properties, and someone who do not merely rely on other people’s opinion.

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A Novice’s Guide On How To Buy An Investment Property

Posted on: April 2, 2012

Categories: Buy, How To, Other Articles, Property Management

Author: Buy Fix and Profit (Guest)

2723279741 3cacbcf5cd n A Novices Guide On How To Buy An Investment Property

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For a lot of people, figuring out how to buy an investment property for the first time can seem overwhelming.  Usually, what stresses the beginner is not only the fact that investing in property is an ongoing financial commitment, but also the fear of failure, and the financial jargon that needs to be learned. True, you can always hire an expert to teach you how to buy investment property and thus minimize confusion and anxiety, but then, knowledge of the property market brings a fulfilling experience when you are able to reap the resulting financial rewards. Contrary to what most late night infomercials promise, investing in property will not likely produce the get-rich quick results as it isn’t as liquid as putting money into the stock market. But then, the rewards can be substantial if you’re patient and willing to do some homework.
Although the market will occasionally rise and fall, many have achieved the road to wealth through real estate. There as are a wide array of property choices to choose from – commercial properties, rental apartments, industrial properties, empty land, mobile homes, condominiums, etc.  All of these come with rewards and risks in both the short and long run.  A strong knowledge of real estate and locale is vital to a successful investment property venture.

How to buy an investment property – Factors to consider

First of all, you need to make sure your investment has a sizable potential return. Some important factors to consider in buying an investment property are:

Location

>Location will always impact the value of any piece of land property. For instance, when it comes to residential properties, a school district and the health of the local economy are some of the necessary considerations. Where there are commercial offices and establishments, there are sure to be available tenants. Why? It is as simple as the fact that workers need a place to live. When considering a commercial real estate purchases, consider that commercial leases normally span longer than a year.  In both commercial and residential investing, due diligence and research on tenants is a must.

Safety

>Although the building/space is excellent, it is much more challenging to get top dollar for a property in a neighborhood that has a high crime rate.

Infrastructure

> The availability of amenities and infrastructure to residents in the surrounding neighborhood can increase the appeal of your property.  Transportation, schools, malls and business offices offer convenience and comfort for your tenant as they need not head out of their immediate vicinity for shopping, entertainment, or work.

What to watch out for when buying investment property

Real estate is a complicated market but a lucrative means to make money. A few things to watch out for when investing are:

Paying more than it is worth

>You can avoid this mistake by doing research. Buy properties that are below market value, those that need little repairs and those that have positive cash flow.

Costs and tax consequences

>Make sure you understand costs for maintenance, interest, depreciation and other property-related expenses.

Overlooking rules and regulations

>Be aware of building codes and rules. Rules abound in the housing sector and fines and penalties for noncompliance can be hefty.

Not screening tenants well

>Make sure to check prospective tenants’ credit and employment to ensure they can afford the monthly payments. Treat your investment property like a business. Be ready to take a business stance when tenants throw personal problems at you like hardships on making payments.

Too  much, too soon

>Start with a small house or a duplex and decide whether this type of investment works for you.  Monitor and budget every cost that will be tacked on to the price including insurance. If major improvements do not provide a decent rate of return, don’t spend too much on it, as this only cuts into your bottom line.

Getting into a bad partnership

> Prime properties possess great income potential but most often, they are priced beyond the budgets of most new investors. Getting into a partnership is not bad as long as you’re comfortable with the arrangement.  A novice teaming up with a real estate professional who has knowledge of the business may be especially good for the newcomer.

With so many experts on the subject on how to buy an investment property, the information overload can be head-spinning.  Nevertheless, buying an investment property should be exciting and being informed is the best way to make smart investment decision.

 A Novices Guide On How To Buy An Investment Property

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How to Buy Investment Property – A Beginner’s Guide

Posted on: March 20, 2012

Categories: Buy, Commercial Building, Investors, Other Articles, Property Management, Residential House

Author: Buy Fix and Profit (Guest)

If you want to learn how to buy investment property because you think this is a get-rich quick opportunity, then you are mistaken. There are lots of things that you should do before you can actually earn substantial income from real estate, and even before you reach that stage, you should know about buying investment properties that will really work with your budget and what kind of profit you are looking for.

How to Buy Investment Property A Beginner%E2%80%99s Guide 300x225 How to Buy Investment Property   A Beginner’s Guide

from highgrowthpropertyinvestment.co.uk

The most common route that new investors make is to buy properties such as a single-family home, townhouse or an apartment building. This is probably the tried and tested first step, as investors can get income from tenants while also getting the benefits of the property’s appreciation. For some who choose the buy and sell route, bigger capital is needed and it might not create an income for the investor at once or while the property is still in the selling stage. If you are choosing an investment property, you should know that there are two ways you can earn from it, cash flow or capital gains.

How to Buy Investment Property by Choosing to Flip

If you want quick profits, then flipping a property is the way to go. Flipping is a real estate jargon which means you will get profit by short-term capital gains as you would not have the property for long-term. There are three basic questions that an investor should ask:

  • How much is the property?
  • How much does it cost to repair it?
  • How much is the selling price?

If you think you can earn more than 20%, then that is a good deal. However, you might be asking how you can make sure you’ll get the profit you need, right? Here are some tips:

  • Do your homework. Check out the value of properties in the area. Scour the Internet for ideas on how much these properties are selling given its location, condition and features. You can also check for public records and see how much the government assess the property you are considering. Remember that in real estate, you make a profit when you buy the property, not when you sell it. So, haggle as much as you can! Also make sure to inspect the property to check for potential sources of headaches and steep repair costs.
  • Look for distressed sellers. This does not mean that you should buy short selling homes, just because the owners are desperate. Look at the property and push the numbers. The good thing about dealing with people who are motivated or distressed is that, they would probably accept your offer, as long as it is reasonable, even if it’s significantly lower than their asking price.
  • Look at different properties. Don’t get tired of looking for the best and the most affordable. Make offers and counter-offers.
  • Get help. Call an investment property expert in your area and ask for their help. You can also seek the help of a good real estate broker.
  • Do not improve the property too much. If you want to put a fireplace on the property, put it on hold. Do not over-improve the property. You will be surprised that buyers are looking at safe neighborhoods and proximity to schools and hospitals, more than a luxurious interior.

Things to Remember When Buying Investment Property for Rent

Another way to earn from investment property is by monthly rent. With this option, you can follow the tips for flipping. However, you should know additional stuff like property management and some accounting. There is an operating income that you should think of, and vacancy factor you should be worrying about. If you don’t know any of these things, then you should hire someone to help you. There are property management companies you can consult, and you can talk to your accountant about computing the expenses and profits you can get.

General Tips on How to Buy Investment Property

Again, researching is the key in buying a great investment property. Because a huge amount of money is involved in this kind of investment, it is best that you study if you can really profit from it before venturing in it.

You should know that you have to check out the location of the property you are considering. It would be an advantage if you can find a property in a good community, which is family-friendly. Look up the crime rate of the community as most people do not like to live in these stricken areas.  It would also be great if you can check out establishments near the area. Is it near schools, hospitals, and shopping malls? If it is, then you could promote it to families with kids. Finding a house or property in a place where jobs are, will also be a great thing.

Whether you are a beginner or an experienced investor, you should always keep these tips in mind.

Study how to buy investment property thoroughly, after all, this purchase may make or break your bottom line.

 

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