RSS Blog Feed10 Tips for Buying Investment Property
Posted at 1:44 PM, Sep. 14, 2007
Whether you are planning to flip a property or just buying to rent and sell for a profit later, here are some things you will want to consider when choosing the property.
1. Price: If you are purchasing just
to rent you can afford to purchase at market value, but it's always
a good idea to get any property below market value if you
can. If you are planning to flip a home you should look
for homes that are at least 30 percent below the market value
of comparable nearby homes.
2. Location: Choose a location with a
low crime rate, good schools, and quiet streets. There isn’t
anything you can do to cure a poor location. To get more
information on what your location offers, there are a few things
you can do.... talk to the neighbors, call the local police
dept and ask about crime rates, call the local pizza delivery and
ask if they deliver to the area, check out http://www.greatschools.net for
more information about schools.
3. Size: Choose a house with three or
four bedrooms. Smaller homes are unlikely to have enough buyer or
rental appeal. Talk to local property managers to find out
what homes rent best in your area. In our area it is
typically best to look for 3 bedrooms and at least 1.5
baths.
4. Avoid homes that need major
unprofitable repairs, include wiring, major plumbing, foundation
repairs, major kitchen and bathroom renovation, room additions,
and/or a new room. Make sure that the "bones" of the house are
good, and...
5. Spend money on profitable cosmetic improvements where you can make money on things like new flooring, fresh paint, light fixtures, and landscaping. Talk to a Realtor to find out what buyers and renters in your area are expecting and what you need to do to make the home you are looking at appeal to buyers in your area.
6. Know the area where you are investing (or make sure you have a Realtor that knows the area well); know what is going on and what businesses may be moving in or what may be going on in areas that may affect property values.
7. Don’t buy a fixer-upper that is
more than 60 minutes from your current residence because it is
important to visit everyday while the renovation work is being
done. if you are doing the work yourself you'll want to make
sure the home is even closer, you'll spend enough time at the house
you don't need to waste time getting there.
7. If you are looking for a rental
property, look for properties that are already rented where the
renter may want to stay. This cuts down on your having to find a
tenant. If you are buying a fixer-upper make sure that your Realtor
writes in a clause that gives you the ability to access the
property prior to closing to assess needed repairs and get
estimates from professionals.
9. Look for sellers who are motivated
to sell and who want to make the sale happen; follow the
foreclosure listings in your area, and watch for homes that have
been unoccupied and on the market for long periods of
time.
10. Understand the foreclosure laws
in the area where you are buying. In some areas it is well worth
buying a foreclosed home, in other areas it may not be. Talk to a
foreclosure attorney in the specific area and make sure you
understand the laws.
View more entries tagged with: None