Contrary to many people’s beliefs, investing in real estate can be easier and profitable than before the economy crisis. Many properties are actually below their market values since the housing crisis hit. The values will pick up again once the economic condition improves. So, now is a good time to buy at discounted prices.
Here are some real estate investing tips to help you evaluate potentially profitable properties and maximize your return on investment.
You can start your initial research using the Internet, searching and researching information have been revolutionized by Internet. You can check on the prices, view photo images, detailed descriptions and other legal information. With Internet, it is literally borderless, you can research properties near by or thousands of miles away. You can also browse around in some of the largest online marketplaces such as eBay, Google Base and Windows Classifieds.
You must also visit Realtor or estate agent businesses. If you can afford it, you can make your search easier by obtaining a Multiple Listing Service or MLS, that way you will get the same information those real estate agents get. However, you may not be able to get a MLS in some locations even if you have the money as they need you to have a real estate license.
Although you can obtain information from the Internet and a MLS, be prepare to do some legwork as well. Once you have spotted a diamond in the rough so to speak, you need to visit the property and check its surrounding neighborhood. This is the only way you can judge if it’s a good investment. While you are on-site, talk to the people in the neighborhood. Also, look for the FSBO (For Sale By Owner) signs while driving around.
Be prepared to make more than one visits, in different kinds of weather and at different times of day, if possible. Visit the property especially on a rainy day so that you can check if there is a leaky roof; not a very convenient time for a survey but the extra effort will pay off in the end. It is your investment that is at stake, so make sure you exercise all due diligence to minimize risk.
After some research and legwork, and if you think the price is right for investment, you can put up a contingent offer. Find an experienced and reliable professional home inspection to help you with a thorough unbiased inspection of the property. This is very important as you want to be sure that there are not potentially serious problems which can cost you more in the future.
Review the inspection report carefully. Although you don’t expect everything to be in perfect condition, you do need to record every major and minor flaws that exist. Leaky roofs, leaky plumbing, damaged walls or floors, damaged windows, inoperative air conditioning or heating systems, stained carpets, etc. Especially look out for any standing water in basements, near the foundations.
Be realistic in your inspection and evaluation, very few properties, even newly constructed ones, are perfect. But if the imperfections are too expensive to repair, they will eat into your profit. Of course, you can’t force the owner to fix all the flaws prior to final settlement, you can use the information to negotiate for the final price. Information is always power when it comes to real estate investing.
Hope these tips are useful to you. Happy hunting and profiting!