Investment properties can make you extremely happy or create a world of frustration. In the best situation, you’ll locate a property that is well maintained by the current owners. A well-maintained home is free of pests, structural damage, health concerns, faulty systems, and electrical or plumbing renovation needs. Your chances for a high return on that investment are good should you decide to use it as a rental property.
Unfortunately, one home that needs thousands of dollars in repairs, construction, or fines can mean disaster. If this is your first investment property, it’s important to do your homework and get the advice of professionals before you move forward.
Why Are You Investing?
It’s a good idea to know what motivates you to invest in a property. Are you looking to flip the house? Could it be your vacation home? Maybe you want a house to use as rental property. Determine your short and long term goals before you jump into the investment waters. Know what you should gain and what you are willing to lose when investing.
The popularity of house flipping shows on television could lead you to believe that real estate investing is a great way to get rich quickly. While you may experience a dramatic return on investment, you should be prepared with the gamble you are taking. Knowing why you are investing will keep you focused.
Investing in properties is meant for those who can afford to take financial risks. If you are currently struggling to maintain your current lifestyle or have other depending on you, consider the risks and the possibility of putting your investment dreams on hold under things are stable.
If you can afford to take the risk because you have financial security on your side, move forward with an eye towards caution.
Don’t Get Ripped Off
You have a lot to lose. Investment properties come with risks. No matter how great the deal sounds, don’t be tempted to purchase a property you haven’t seen. Beware of buying a property in an unfamiliar area.
Property price isn’t the only consideration. As an investment buyer, you need to be aware of city codes, regulations, and laws. It’s best to understand the local community, current economy, and real estate market trends. It may sound funny, but you even need to know about weather conditions in the area and potential weather threats.
Research is your best friend when it comes to investment buying. Be committed to learning all you can about the real estate market and the local community.
Build a Trusted Team
There may be an “i” in investment, but you shouldn’t attempt to go the journey alone. Take some time to build a team of trusted professionals.
Choose a successful real estate agent who is willing to stick with you through the investment process. If you plan to rent the property, seek a reliable management team to help with the daily details. Find a trustworthy company to handle repairs and construction needs. If you don’t live near the investment property, or find you’re just too busy, have someone who can check on the property on your behalf.
Things to Consider
• Property insurance costs could be higher.
• Renters may cause damage, and you might need to make repairs between tenants.
• Real estate market trends matter. The home may not be worth as much next year as it is this year.
Tips for Finding the Right Real Estate Agent
• Look for an agent with experience in investment properties.
• The agent should be experienced with the type of property you are buying. Examples include luxury homes, waterfront homes, and multi-unit properties.
• Do some research online. Check their website, social media profiles, and reviews.
• Your friends, family members, and associates in the area you’re buying usually present the best recommendations or warnings. Ask around to get their advice.
Not everyone can handle the ups and down of investment real estate, but if you know the reason you’re investing and have a solid plan, investment properties can be rewarding.
Your real estate agent is the best source of information about the local community and real estate topics. Give Rachael Hughel a call today at 818-397-8177 to learn more about local areas, discuss selling a house, or tour available homes for sale.