investing in real estate
Buying a home is more than just finding some place to live or rent. Buying a home is one of the most important investments you can make. If you do your research, budget correctly and learn when the right time to buy and sell is, owning a home or two can be quite beneficial.
If you’re a first time home buyer looking to make a pretty penny, make sure you follow these steps before you sign the highlighted line at closing.
Many investors neglect to research the area before they buy a house. It is important to find out favorable schools, education systems, convenient locations, such as being close to a city or town, crime stats and the neighborhood market value of houses. Other facts like HOA (Homeowners Association) and any possible major improvements in the area, such as a park or library, are also things to look for. These are all things that should be noted before purchasing a house. Not only will it make the home more desirable for others to buy, it will also increase in value.
Although it will cost you a couple extra hundred dollars, it is recommended to get your prospective home investment inspected by a certified property inspector. It could save hundreds of thousands of dollars in the long run, as you could have purchased a house with more repairs than it is worth.
Some may look at working with a professional real estate agent as a con, as you will have to give them a small percentage of your investment (usually about 3% to 6%). Working with someone who knows the in’s and outs of real estate is one of the most beneficial tools to utilize when investing in homes. Real estate is an ever-changing game, with fluctuating prices, new laws and loans that many of us do not stay privy to.
So you’ve finally found the house you want to invest in. Now ask yourself, how you want to profit from it? Do you want to do a fix and flip or do you want to rent it out for monthly income?
A fix and flip could turn out to be a financial boost or a fiasco of rotting floorboards and caved in roofs. It is not uncommon to see an old house sell for tens instead of hundreds of thousands of dollars. Most of these people think they’re going to be able to fix and flip and make maximum profit, which is a possibility if done correctly. However, in most cases, a person looking to fix and flip, is looking to save every dime possible in order to try to make the most money possible. This is the type of person who decides to redo all the electric wiring, rebuild the walls and redo the plumbing by watching youtube videos. Ask yourself this, would you invest in a house that an untrained person “fixed?”
The best way to get a great return on a fixer-upper is to invest in a professional team that will make your life easier and your property investment up to code.
Renting out properties have become one of the most desired sources of income in recent years. Who wouldn’t want to collect a paycheck for owning a house or two? In order to become a successful landlord, there are some things that you should consider first.
Renting out a home comes with lots of benefits, for example, you could retire and work from home. What many do not realize is that renting out properties is also a job. First, you have to reel the renters in with the beautiful design, upgraded appliances and remodels. Next, come maintenance and repairs. No house is perfect, nor will it ever be, things stop working and tenants are more than glad to tell you when. It is your job as a property owner to make sure the house remains functional for your tenants.
Not everyone looking to rent a house has the best track record. It is important to have a background and maybe even drug tests done on potential tenants. Background checks are important to find out financial payment history on previous homes as well as finding out what kind of person you are letting into your home and neighborhood.
If you’re wanting to rent out a property without all the hassle, there are always property management services you could take advantage of. Property managers help homeowners keep a property maintained, repaired and even rented out. All you do is collect the check.
Now that you know some of the basics for the best return on investment (ROI). Get out there and make smart decisions when it comes to investing in real estate.
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