Real estate investing is a tempting proposition these days. With so many great deals out there, how do you know if you should invest in a property? Real estate evaluation can be tricky.
While it is true that you can make money by investing in real estate, it does take time, money and know-how to do it. Here are some property tips to keep in mind.
First of all determine what kind of property you want: commercial or residential. If it’s residential, will you use it as your primary residence, a secondary residence or a rental property? Also, as they say in the real-estate industry, the most important thing to consider is “location, location, location.” Where do you want your new property to be?
Finding property can be fun. A lot of the legwork you can do on the Internet. You can find property listings with pictures and all the information you may need. If you want to invest in more than one parcel, consider purchasing access to a multi-list service (MLS), but be advised that, depending on local regulations, you may need to be a licensed real-estate professional.
You can easily spend hours, days or weeks checking out the listings, but you should not buy a property without stepping away from the computer and going to look at individual sites. As you visit each one, be sure to notice the surrounding neighborhood. Are other properties in good repair? Do you see a lot of “For Sale” signs? If you are really interested in a particular area, take the time to visit briefly with some of the residents. Are there any major problems in the area? Read the local newspaper: does the area seem to be on the rise?
If there is a specific parcel you are interested in, talking to a neighbor may help you find out about problems. The neighbor could tell if the property ever becomes flooded or if he or she often sees repair trucks on the site.
Be sure to visit the parcel itself several times, at different times of day and in different weather. Go when it’s raining and you may find out about a leaky roof or basement. Going on a weekend night will tell you if the neighbors are noisy. Going in the winter will tell you if the furnace works properly.
Unless you are a real estate professional, be sure to hire an inspector before you buy a property. The inspector will list all the major and minor problems he or she finds. Of course, do some inspecting yourself as, unfortunately, not all inspectors are honest.
When you find flaws, do not consider them to be “deal killers”. Instead use them as bargaining chips to drive down the selling price. The owner may be willing to reduce the price if you offer to pick up the cost on some repairs.
When all is said and done, real-estate investing takes a bit of effort. However, if you do your research, both online and onsite, you can get a great return on your investment.
Tags: Finance