Real estate investing can be a lucrative process, or it can leave you high and dry. Your success depends on how well you know the market and how well you know the tricks of the trade. Below are just a few suggestions from the experts to help you consider if these kinds of investing is the right choice for you.
Look For Motivated Sellers
This is important because you want to get the best possible deal for your investment and maximize your profit. A motivated seller is going to do what it takes to move the property and that’s good for you because it allows room for negotiating. For instance, suppose a house has been on the market for a year and the asking price has barely dropped, if at all. This kind of seller is not very motivated to sell the property. On the other hand, multiple price reductions indicate a more motivated seller and a willingness to take a deal.
Do Real World Research Before You Buy
Certainly, you want to research the general field of real estate investing by reading articles like this one and attending webinars hosted by experts, but you also want to do more specific research. Before committing to buy a property, investigate it. Sit in your car for 8-10 hours to see if everything the listing said about the property and the neighborhood is true, suggests Lee Kiser of The Kiser Group. The last thing you want is a property that’s unrentable because it’s in a bad neighborhood.
As Crazy As It Sounds, Avoid The Hot Market
The first thing you’ll want to do is to identify the area with the greatest amount of growth. While this area will be highly sought, it will also be an area with rising asking prices. Instead, look for deals just outside that area.
“As real estate values skyrocket, this instantly starts pricing people out of the hot market and they often look at the spillover markets that mirror most of the winning characteristics of the hot market,” says Douglas Elliman’s Sharran Srivatsaa.
Look For “Scratch And Dent” Properties
These are those houses that may not look pretty, but, in reality, the fixes may be mostly cosmetic. While you may be able to use the damage or disarray to negotiate a lower purchase price, you should be able to fix the property up quickly. A short turnaround means you can recoup your expenditures quickly, either by reselling the home or using it as a rental property.
“[House Flippers] can do very well in a market where home prices are on the upswing. That’s what we’re in right now in many areas of the country,” says Daren Blomquist, vice-president of RealtyTrac.
Maximize Your Income With Vacation Rentals
While this item depends on your location, those in prime vacation destination spots may want to look into this as an option. We all know that vacation rentals charge more for a stay that’s often very temporary. These are two aspects that make short-term rentals more appealing to property owners.
“I believe that right now, in most markets, prices have hit bottom or are already starting to come back up,” says Christine Karpinski, author of How to Rent Vacation Properties by Owner.
Karpinski adds that this is the right time to dive into the real estate market. Whether you’re looking to flip or rent out property, the author and investor suggest it’s time to act, before the market takes another turn.
Considering taking this route to financial freedom requires some research and deep thought, but a real estate professional may be able to assist you. By reaching out to a knowledgeable realtor and discussing your interests, you may soon be on the path toward an exciting new future.