Jan. 1, 2006 - Any tips for first time investors?

Getting into real estate as an investment is a very hot topic these days. 

For those that are buying rental property, I would say the biggest mistake is that they choose price over location.  An investor who is going to use the property as a rental is still going to eventually sell it.  So picking the worst location because it is the lowest price will come back to bite them when they are ready to sell.

The second biggest mistake is looking at property as if they are going to live in it.  First time investors often overpay for a remodeled property when the cheaper, uglier version will rent for exactly the same price as the pretty one, with little variance.  Better to buy the ugliest property in the best location and then fix it up just enough to get a good rental price.  Save any major overhauling until you are ready to sell it. 

For those who are buying a property to remodel it and sell it (flip it), the main issue has been speed.  HURRY UP!.  Get everything in place for the remodel while the property is in escrow and get the work done as soon as you close escrow.  Carrying charges build up and eat away at your profits. 

Jan. 6, 2006 - Untitled Comment