Buying a real estate, especially homes, to rent our flip for profit is an excellent investment in almost every way. While housing prices are currently losing value, trends like this don’t happen often and you can expect house prices to rebound within a few years. Investing in real estate is perhaps the safest investment you can make, although there are a few things you should watch out for when buying for profit.
Acquiring property or real estate can be tricky, in regards to doing it right at least. While buying a home low and selling high, or finding ideal rental properties sounds like an easy thing to do – there are millions of speculators and agents looking for prospective properties all the time. It’s important to be informed during the buying process.
Real Estate Buying Advice
Local real estate agents are your friend. Enlist the help of a grassroots agent when searching for properties in a certain area. This is a good idea because they know the area well and are familiar with the housing values and sales trends. Local agents are the first line of offense for negotiating low prices, especially if you don’t have much experience.
If you have a personal laywer, having them research any property you’re thinking about investing in. While your real estate agent is there to help, it’s best to never rely on one single person no matter how much you trust him or her. Your independent research results are the most important, afterall everyone else is there to make a buck just like you.
Look at as many housing properties as you can. Do your best to enjoy this process, else it could become tedious. You’ll learn things to watch out for and find better deals if you leave yourself more options to walk away. Never buy anything on the spot or without looking at a few other properties first.
Don’t make offers on properties owned by anyone who died interstate, or properties in dispute by families. These usually have a high rate of litigation and can become costly.
Lean towards homes that are already vacant. When buying rental property, or a home that is currently rented, you may be bound by contracts much more complicated than may appear. Only close when a tenant vacates the property, or if you can put the tenant under your own contract upon closing.
If you’re not experienced managing rental property, considering hiring a property manager or real estate company to manage the property professionally. These people have much more experience dealing with contract enforcement, eviction, maintenance and repairs.
When borrowing the money to buy real estate, consider taking out the longest repayment schedule possible, so that in the even of hardship or vacant property periods you can afford to cover the mortgage. Doing this will also put more money in your pocket on a monthly basis, making it easier to cover unexpected repairs and save funds in your personal or business account.
Make sure you get a healthy deposit or consider upfront payments in lieu of a discount or some other encouragement. Getting as much money upfront ensure the tenant will stay up on their rent payments and take care of the property.