Buying an investment property is a risk. Sometimes risk is a must to reach success though. There are many things you need to consider before you get out that check book. Here we offer you some important tips as you begin your journey into investment properties:
Location – Location – Location!
This needs to be your very first consideration – location. Not only will the right location determine how fast you lease the property, but the quality of prospective tenants too.
How is the competition?
Research the area online and look for rental listings in the area. If there are numerous ads, this may not be a good area. Or it could be a seasonal area such as beach property.
What conveniences are close by?
It is important that your potential tenants have conveniences to grocery stores, gas stations, churches and parks.
What is the crime level?
A quick stop by the local police station or reading the local news paper for police blotters can tell you a lot about a neighborhood. Tenants want to know they are safe.
Size does matter:
When you start your search for an investment property, remember to keep potential tenants in mind. A good average size is 3 bedrooms and 2 baths. Avoid properties that have 4 or 5 bedrooms and only 1 bath.
Family friendly is a must:
Chances are that your prospective tenants will be a family. Choose a property that is in a good school district and in walking distance is even better.
How old is the house?
You should look for properties that are no older than 20 to 25 years old. Anything older may not be up to code and have more maintenance problems than you want to handle.
What else can you expect to pay for?
We all know the taxman will be a part of this purchase. There is no standard rate for taxes. Check with the city, the county and ask about HOA fees.
Protect your investment:
There are two things that you must do to protect your investment. Accidents happen so make sure you have insurance. The next important thing is ask for rental history of all potential tenants. Then check those references out!
Above all, you want to make sure what you can afford and if this is the rental that will make you a profitable deal. By following these tips you will have a positive experience in your first
Monday, January 25, 2010
How Does Real Estate Investing REALLY Work?
If you are looking at going into the world of real estate investment, make sure your expectations are realistic. You need to be patient for the good deals to come and not jump on just anything that could lead to regrets later.
Know first and foremost, you will have to spend money. When buying real estate, there will be cost of borrowing, closing fees, attorney payments, agent commissions or down payments; unless you join a network of investors who rely on a middle man type service that eliminates the extra costs associated with buying investment properties on the traditional market. Any promise that you can make money from real estate investing without spending money is one you should walk away from, it’s absolutely not true.
Make sure you choose a good location, buying the cheapest house is not the only factor.
Know the market, find and learn the location that will be profitable. If you still have that cheap deal in 2 years, you obviously don’t have the location of interest for buyers.
The claims that you can make hundreds of thousands of dollars in real estate investing probably came from someone who forgot about the month of April. This is when capital gains tax is due on the profits of your investments and that can be a sizable amount of money. Yes, you’ll make money in real estate investments, but don’t forget that you have to pay taxes on that money.
There are tons of instructional DVDS and eBooks on the market as well as expensive seminars that are advertised as professional and certified services. Your best bet is to find a quality real estate agent that is familiar with the area you are purchasing property. They will know the foreclosure and short sale market. Spending money on a real estate attorney is worthwhile, they will know the laws on state foreclosure and redemption laws. Have a relationship with a good house inspector who will give you advice on properties and help you to make you sound investments.
A home appreciates over time, the longer you let it appreciate, the more money you will make on your investment. During this time, find quality tenants that are reliable and pay rent, making you a little cash while you wait on the appreciation. While you will make money in real estate investments, it will take time. Patience will be your best tool.
Know first and foremost, you will have to spend money. When buying real estate, there will be cost of borrowing, closing fees, attorney payments, agent commissions or down payments; unless you join a network of investors who rely on a middle man type service that eliminates the extra costs associated with buying investment properties on the traditional market. Any promise that you can make money from real estate investing without spending money is one you should walk away from, it’s absolutely not true.
Make sure you choose a good location, buying the cheapest house is not the only factor.
Know the market, find and learn the location that will be profitable. If you still have that cheap deal in 2 years, you obviously don’t have the location of interest for buyers.
The claims that you can make hundreds of thousands of dollars in real estate investing probably came from someone who forgot about the month of April. This is when capital gains tax is due on the profits of your investments and that can be a sizable amount of money. Yes, you’ll make money in real estate investments, but don’t forget that you have to pay taxes on that money.
There are tons of instructional DVDS and eBooks on the market as well as expensive seminars that are advertised as professional and certified services. Your best bet is to find a quality real estate agent that is familiar with the area you are purchasing property. They will know the foreclosure and short sale market. Spending money on a real estate attorney is worthwhile, they will know the laws on state foreclosure and redemption laws. Have a relationship with a good house inspector who will give you advice on properties and help you to make you sound investments.
A home appreciates over time, the longer you let it appreciate, the more money you will make on your investment. During this time, find quality tenants that are reliable and pay rent, making you a little cash while you wait on the appreciation. While you will make money in real estate investments, it will take time. Patience will be your best tool.
Wednesday, January 20, 2010
Things You Should Know Before Investing In Real Estate
Before you plunge into real estate investing, there are things you need to know. First learn the property values in the area you are buying. Compare sale prices of properties currently on the market and those recently sold. Address what the tax benefits will be, examine the capital appreciation and estimate how much cash flow you’ll need. You will also need to hire a professional to examine the property that is experienced in value driven real estate.
Tax laws change, so make sure you know the tax laws in your area and evaluate the situation to determine if it will be to your advantage. Consulting with a tax advisor is always a good idea. Planning your property value based on today’s tax laws may not be wise if the laws change before the end of the year.
You should become knowledgeable about the area you’re buying into in regards to all properties such as homes, condominiums, apartment buildings, fixer-uppers, foreclosure and others. Choose a financing option that is right for the property you want.
Double check your insurance coverage’s replacement value of the property. As the cost of replacement increases, so does the rate. Make a call to the local utility companies and inquire about the most recent expenses for the property. If you are renting the property and including the utilities in the rental rate, you definitely need to know where those rates have been and estimate where they may go.
As a real estate investor, avoiding a negative cash flow will eliminate frustrations. You don’t want a property that will take hunks from your daily cash flow, that will lead to financial problems or cause you stress. Damage control will help keep you from having to sell the investment before you can realize the benefits of ownership.
Start your life as a real estate investor in Virginia today.
Tax laws change, so make sure you know the tax laws in your area and evaluate the situation to determine if it will be to your advantage. Consulting with a tax advisor is always a good idea. Planning your property value based on today’s tax laws may not be wise if the laws change before the end of the year.
You should become knowledgeable about the area you’re buying into in regards to all properties such as homes, condominiums, apartment buildings, fixer-uppers, foreclosure and others. Choose a financing option that is right for the property you want.
Double check your insurance coverage’s replacement value of the property. As the cost of replacement increases, so does the rate. Make a call to the local utility companies and inquire about the most recent expenses for the property. If you are renting the property and including the utilities in the rental rate, you definitely need to know where those rates have been and estimate where they may go.
As a real estate investor, avoiding a negative cash flow will eliminate frustrations. You don’t want a property that will take hunks from your daily cash flow, that will lead to financial problems or cause you stress. Damage control will help keep you from having to sell the investment before you can realize the benefits of ownership.
Start your life as a real estate investor in Virginia today.
Thursday, September 17, 2009
Property Tips for Real Estate Investing
There is no doubt that real estate investing is one of the better investment options available in today’s economy. With the large number of foreclosures, distressed properties and homeowners that need to sell, the cost of real estate has dropped and investment opportunities have grown. The trouble for many is determining how to pick the best property to invest?
Although there is no question that making a profit through real estate investing is possible, it must be understood that the process does take some time, know-how and, of course, money. Your evaluation process on potential investment properties can make or break your profit strategy. Here are a few tips on the proper know-how for picking the best property for your real estate investment dollars.
You can start by identifying what types of properties you are going to be dealing with. Both commercial and residential properties are available for investors and both offer different rental and turn around opportunities. If you are considering residential properties, you should know in advance if you plan to live in the property, rehab the property for resale or renting. With commercial real estate, the choices are much the same, but one thing that reigns true for both types of properties is their location.
The location of your property is going to be vital. It is important to identify the market that you will be able to resale to with considerations of school districts, the condition of the neighborhood and simple things like buying ranchers to rent to the elderly. Whether you are looking for properties in Northern Virginia or downtown Richmond, you need to know to have a plan when you look at a property and see its long term potential.
Once you have a potential real estate investment property in mind, take the time to visit the property at different times during the day. What may seem like a quiet street may turn into the Mardi Gras after dark. Getting a building inspection and appraisal of the property completed are two other great ways to ensure that you know what you are investing your hard earned dollars into.
Buying properties at wholesale can make your real estate investing dollars go a lot further. Once you start your real estate investment investigation you may decide that becoming a real estate investor is more work than you were ready for. There is still another option that allows you to reap the great rewards of high earnings from real estate investments, without all the work and that is to become a private cash investor with another real estate investor. No matter which road you choose, the returns seen by individuals investing in real estate are greater than those being seen on today’s stock market.
Although there is no question that making a profit through real estate investing is possible, it must be understood that the process does take some time, know-how and, of course, money. Your evaluation process on potential investment properties can make or break your profit strategy. Here are a few tips on the proper know-how for picking the best property for your real estate investment dollars.
You can start by identifying what types of properties you are going to be dealing with. Both commercial and residential properties are available for investors and both offer different rental and turn around opportunities. If you are considering residential properties, you should know in advance if you plan to live in the property, rehab the property for resale or renting. With commercial real estate, the choices are much the same, but one thing that reigns true for both types of properties is their location.
The location of your property is going to be vital. It is important to identify the market that you will be able to resale to with considerations of school districts, the condition of the neighborhood and simple things like buying ranchers to rent to the elderly. Whether you are looking for properties in Northern Virginia or downtown Richmond, you need to know to have a plan when you look at a property and see its long term potential.
Once you have a potential real estate investment property in mind, take the time to visit the property at different times during the day. What may seem like a quiet street may turn into the Mardi Gras after dark. Getting a building inspection and appraisal of the property completed are two other great ways to ensure that you know what you are investing your hard earned dollars into.
Buying properties at wholesale can make your real estate investing dollars go a lot further. Once you start your real estate investment investigation you may decide that becoming a real estate investor is more work than you were ready for. There is still another option that allows you to reap the great rewards of high earnings from real estate investments, without all the work and that is to become a private cash investor with another real estate investor. No matter which road you choose, the returns seen by individuals investing in real estate are greater than those being seen on today’s stock market.
Tuesday, August 18, 2009
What To Look For When Investing In Rental Properties
When it comes to cash real estate investing, it can be hard to determine what exactly it is that you want your long term investment to accomplish and how much is too much work to get there. Generally, investors that deal in cash real estate investments are looking for a way to get the highest and fastest return on their venture and a rental property definitely fits such criteria-if it is in the right condition at the time of purchase. Experienced real estate investors buy and sell rental properties based on their return on investment potential.
Many real estate agents and brokers have the mindset that rental property investors are only going to want a property that is in prime condition, but this is not always the case. A cash real estate investor will look at a property and assess what is needed to bring it up to a rental standard. It is the potential income stream of a rental property that truly makes it a worthwhile investment.
It is important for cash investors to “run the numbers” when it comes to a rental properties potential. Will the cost of rehabilitating a property allow for enough of a rent increase to make it a solid return in investment. This takes a consideration of other rental amounts and conditions of other rental properties in the area.
When you are considering investing in rental properties, there are a number of factors that are not always important. A beautiful, immaculate rental property may not offer a high enough return on investment to make it profitable, while a rental in need of basic repairs could be the big cash real estate investment opportunity an investor is looking for.
Many real estate agents and brokers have the mindset that rental property investors are only going to want a property that is in prime condition, but this is not always the case. A cash real estate investor will look at a property and assess what is needed to bring it up to a rental standard. It is the potential income stream of a rental property that truly makes it a worthwhile investment.
It is important for cash investors to “run the numbers” when it comes to a rental properties potential. Will the cost of rehabilitating a property allow for enough of a rent increase to make it a solid return in investment. This takes a consideration of other rental amounts and conditions of other rental properties in the area.
When you are considering investing in rental properties, there are a number of factors that are not always important. A beautiful, immaculate rental property may not offer a high enough return on investment to make it profitable, while a rental in need of basic repairs could be the big cash real estate investment opportunity an investor is looking for.
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