In most cases making a real estate investment is a wise choice. Recently a client of mine decided to put his non owner occupied home that he purchased as an investment 10 years ago on the market for sale. It cost him a little over $47,000 dollars and by the time he decided to sell, it was already paid off (thanks to the renters) and he is listing it for over $207,000. Now that is what you call a great return!!! However, people are usually faced with so many questions that they might be potentially deterred from making such an investment. So let’s discuss several factors that you should consider before making such a major decision.
1-The Market You’re Buying In
Carefully analyzing the neighborhood your potential property is located in is pivotal. What does the future hold for this city or region and how will it affect your property’s price/value should you decide to sell it? It is also important to keep a close eye on developing area’s nearby, trendy upcoming neighborhoods can significantly affect a potential buyers interest in your property. As you may already know, Temecula and Murrieta California are some great places to own investment properties. However, if you missed the chance to get your investment property in Temecula or Murrieta, there are still a few great deals in the nearby up and coming cities of Menifee or Winchester California . I really like the growth that is occurring there. I’ll describe these cities in an upcoming blog post.
2- Return On Investment
It’s obviously smart to invest in a property that will give you a high return on your investment. Don’t avoid properties simply because they are need of some renovations, as the flaws will help you buy cheap and sell high after renovating. In fact most seasoned real estate experts will assist you in finding contractors and suggest that you’d be better off to buy a structure that needs renovations to help maximize potential profits.
Real estate comes in various shapes and sizes which can easily translate into different prices. As a buyer this can result in serious temptation to spend beyond your means but that shouldn’t be the case if you’ve prepared a budget. By consciously planning the money you can afford to spend on property you will be able to make a successful investment and avoid future losses. Remember its not just the mortgage that needs to be taken care of, you will need to put money aside for maintenance. The water heater, garbage disposal, sprinklers toilet etc…… will eventually give out and you want to have enough funds put aside to have that covered when they fail.
4- Established Or Under Construction
As a new investor there is always the choice of buying a property that is seasoned/established as well as one that is still being built. The latter provides options to customize with upgrades that will ad resale value and may have attractive pricing as well as clear titles. The downsides to such an investment is that you might experience delays in possession or minimal knowledge of the area since it may be on the outskirts because many newly built communities are built there.On the other hand, established homes may be quite expensive but you’ll often find comfort in the neighborhood their located in.
5- Real Estate Agent
Finally, you should consider the assistance of a real estate agent to help guide you through this process. This is the best decision that you can make if you want to make the best possible investment. An agent like myself will understand the property market, be familiar with various neighborhoods and will have close connections with financial institutions that you might need for lines of credit. ( ask me I’ve got you covered ) The biggest advantage of having a real estate agent in your corner is that we understand all the legal jargon involved in the delicate investment property process. This will only help you to make an ideal choice without the risk of buying a property that’s entangled in legal issues.
Real estate is a great way to invest and protect your wealth but that is only possible if you make careful considerations before signing your signature to the sales document. This keeps you safe from unscrupulous dealers while ensuring that you get the highest returns in the long term. It might take some time to analyze all the factors involved in a successful purchase but that is a small price to pay if you want to land the best piece of real estate available. Working with a real estate agent will get you a clear understanding of the landscape in order to gain more confidence in the property you buy.
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