Many people dream of becoming real estate investors, but not everyone has what it takes. If you dream of becoming an investor, here are several important questions to consider long before purchasing your first investment property:
1) Why would a homeowner sell a house at a bargain price?
Many things happen in people’s lives that make their home suddenly become a burden. Loss of income, divorce, or illness are the most common, but sometimes a homeowner dies and leaves a home that none of his heirs want. In any case, housing has become a problem, which is where you come in, as an investor. The owners, or heirs, have a problem and you must find a way to offer a solution.
2) What type of houses should you look for?
In addition to being owned by someone who no longer wants or cannot afford to stay in a property, you want to find a home that is just tired and does not need structural work to compete favorably with similar homes on the market. We call that kind of house a “doghouse.”
3) How are the dog kennels?
Your real estate agent can scan the MLS listings for repairmen, handyman specials, or homes as-is. You can also find similar properties yourself, using the local newspaper or the buyer.
4) Should I try to close quickly?
This is an important step to be successful, because struggling salespeople will almost always need money in the shortest amount of time. Get prequalified and pre-approved for a loan so you can close the property quickly. Being able to let sellers know that they will get paid quickly will allow you to consistently get more homes than the competition.
5) How do you change houses quickly?
Find ugly houses in good neighborhoods that need as little work as possible. Clean them, paint them inside and out, and install a neutral shade of new carpet, and you should be able to turn the house around in no time. Always keep your limitations in mind. Hiring professionals for repairs will reduce your profit margin.
Asking yourself these questions will help you get started on your real estate investment career, and keeping these answers in mind at all times will prevent you from making costly mistakes when buying and selling investment property.
(c) Copyright 2014, Jeanette J. Fisher. All rights reserved.