Sometimes, investing in real estate market, especially for beginners, can become a daunting task. Moreover, the availability of almost a countless number of books, blogs and media gurus is adequate enough to make you get lost. In this post, we’ve jotted down some useful tips that would help you succeed in your new endeavor.
- Do your homework and look around: Before diving in the real estate market, it’s immensely important to do proper homework. Connect with people online and offline to have solid grasp of your local real estate market. Look around for the people who want to sell house quickly or want to sell house without repairs. Contact your local agencies that are looking to sell vacant houses.
- Plan your future goals: Before buying your first property, determine the expected returns from the investment. If you feel hesitant creating your financial goals, take the help of a financial adviser.
- Visit lots of properties: Don’t make up your mind when you first see a notice hanging outside a house that says “looking for cash house buyers”. Many investors purchase properties because of their outer look, ignoring the actual inner condition. As you won’t be residing there, it’s better to keep the personal preferences away. Take a decision only after you’ve visited and thoroughly checked plenty of properties. First, allow yourself to have a vast range of choices and then gradually finalize your pick based on your criteria.
- Perform complete financial analysis: Think of different alternatives to decide on the most profitable one. Stay away from the sellers who set a higher price than market value by showing you the estimated price escalation in future, especially when they encounter cash home buyers. Make sure that you’ve thoroughly gone through and understood the previous years’ documents including maintenance records, property-tax bills, tax returns etc.
- Find motivated sellers: You can do a simple workout to identify motivated sellers. For instance, if a house has been on sale for $100,000 with almost zero price reduction, then the seller is probably not willing to handover the property. But if you see a similar property with similar price tag which has now lowered down significantly, then perhaps the seller needs to sell house fast by any means. You can try out the following methods to find out motivated sellers:
- Look for notices that say “buy my house” or similar ones
- Attend open houses
- Look into the classifieds section in local newspapers
Finally, think big but start small. At the inception stage, purchasing larger properties can make your foundation unstable. So, focus on purchasing a small apartment, duplex, condo or similar properties initially. Then, as you start understanding the know-how’s of real estate investment and develop a strong foundation, start scaling up from there.