Do Your Homework
Look at market conditions and consider house trends and mortgage rates. In a buyer’s market, the number of homes for sale far exceeds the demand. This gives you more options and greater negotiating leverage. Through intelligent use of leverage (mortgage financing), bargain hunting and knowing your market you’ll be able to enhance your profits right from the day you purchase your property.
Once in a Lifetime Deals can Happen Once a Month
Great deals may not be everywhere you look, but there are many of them around. Some experts suggest that you must look at 100 properties before finding the right one. (see: The Golden Rules of Investing: 100:10:3:1). Do you remember Easter egg hunts as a child? Parents don’t say how many eggs they’ve hidden, the children just keep hunting until they find more. Even after finding a great deal, you can continue to hunt for more and more great deals.
Make Your Money When You Buy
You reduce risk and increase your chance for great returns when you buy property at or below their market value. Buying smart in the beginning will enhance your profit in the end. You want your home to increase in value as much as possible.
Buy the ‘Deal’, not the House
Ensure that when you are buying your investment property, you are buying on the basis of returns and not because you adore the house. If you are buying to invest, it is not going to be your home. Stick to investment factors. Do the numbers work and what are the growth prospects? Consider items such as preventative maintenance, upkeep and repairs.
Don’t Fear a Down Market
Think outside the box. Buy when everyone else is selling. When the market is slow, sellers will be more flexible and you may end up with a better deal. With fewer buyers and more homes available you have greater negotiating leverage.
Hold on to your properties. Long-term appreciation will boost a property’s value. Many people claim they should have waited to sell because although they made a small profit at the time, they would have made much more now if they had of held on to the property.
You don’t have to start by purchasing more than 1 or 2 properties. This allows you to effectively calculate the costs of maintaining rental property and assuring that you won’t over extend yourself. You need to be prepared for unexpected vacancies, higher-than expected expenses or maintenance repairs. Having a safe level of financial reserves will help you through the downturns.
These tips may seem simple and that is the point. Real estate investing can be simple if you are knowledgeable and well informed. These simple guidelines are a great start to real estate investing. We hope that you have found them useful and we look forward to helping you reach your personal investment goals.