|Buying Property Tips#1: Choose the Right Location|
|Before you choose a location, it is of utmost importance that you consider the development prospect of the area. Other factors to consider here is crime record of the area, availability and nearness of public facilities and utilities.|
|Buying Property Tips#2: Study the Local Market Dynamics|
|It is important to get well familiar with the local realty market. Learn the variation in property prices by street. Don’t shy away from asking a few realty investment agents questions to get better insight on the matter.|
The global meltdown in 2008 gave birth to the housing crisis and the real estate market slid sharply. However, this slowdown in the market also opened doors for foreclosure investing. With businesses shutting down shop, unemployment and unpaid loans, the American neighborhood saw a sharp rise in the number of foreclosures.
Real estate investors then shifted their investments from regular real estate to foreclosures. The buy/fix/sell and buy/fix/rent formula is indeed profitable. San Antonio real estate investing is indeed a lucrative venture.
But, attractive ventures also have their setbacks. If you are a real estate investor, you need to avoid the common mistakes that most real estate investors make.
The “take-care” list –
Market knowledge: Novice realestate investors often fail to understand the importance of thorough market knowledge. It is important to possess adequate information about the supply curve and average days on the market. Both these data formulas are available with real estate brokers on the MLS.
Correct value: Real estate investors sometimes depend on various websites for the appropriate value of the property. However, it is advisable to conduct a proper research and assess the value yourself or with the assistance of an expert. Website values may be misleading.
|Buying Property Tips#3: Choose the Right Property|
|Getting the right property right away is quite unlikely. First, you need to be clear on why you want to buy an investment property. After that, you will be able to make right decision based on factors like remoteness or accessibility of the property.|
|Buying Property Tips#4: Do the Math Properly|
|Get a precise idea on the value of assets you have available. If you are investing in rental property, make sure you can easily cover the mortgage payment through rents. Additionally, get a clear idea on the appraisal value of the property beforehand.|
|Buying Property Tips#5: Consider Additional Expenses|
|When purchasing an investment property, it is not only the selling price that investors need to consider. There are various additional expenses such as property tax, home owner’s insurance, repair & maintenance that must be considered.|
Estimating repairs cost: While investing in foreclosures, an appropriate estimation of the repairs and rehab costs is a must. Else, underestimated repairs cost might eat into your expected profit ratio. A smart idea is to call a professional to evaluate. Three different bids from various experts will help you arrive at the closest estimate.
Rehab contractors: The repairs and rehab is what adds value to a distressed or foreclosed property. Often the worst contractors are those that do not have a license and work inefficiently. You might lose more than you intend to save by compromising on the contractor. Choose an experienced and efficient contractor for the work.
Issues involved with property: Often, foreclosures are burdened with unpaid taxes, debts, liens and so forth. Do your homework before the purchase.
Lack of marketing plan: Simply purchasing properties from the MLS or from brokers is not enough for successful investing. A well-created marketing plan is the key to success. Purchasing property, selling, re-investing, exit strategy and so forth must be clearly planned before stepping into San Antonio real estate investing.
Absence of script: Investors purchase handsome properties and set out to make profits. However, when an interested buyer calls, they do not know what to ask. It is advisable to prepare a script in advance. List out the essential questions you need to ask the interested party to close a sale successfully.
Business plan: Some investors fail to have a business plan for investment. Chalking out a business plan is as important as the business itself. A clearly written business plan sets the path for the investor. A well-planned investment reduces the chance of failure.
Real estate investment is an attractive venture. Investors are lured by the handsome profits it promises. But, it is essential to avoid the pitfalls and gain from the opportunities.
|Buying Property Tips#6: Inspect the Property|
|To ensure that you are getting everything you are paying for, a thorough inspection of the property is essential. Besides ensuring that you are not overpaying, a rigorous property inspection also gives you a good estimation on what the additional expenses might be.|
|Buying Property Tips#7: Pick the Right Financing Option|
|While interests on investment property loans are tax free, some borrowing costs aren’t immediately tax deductible. Knowing that, and structuring your financing in accordance is crucial. Don’t hesitate to ask for help from a financial advisor.|
|Buying Property Tips#8: Invest through Equity|
|One of the best ways to purchase an investment property is to leverage the equity of another property (including your primary home). This is a preferable way among regular investors, especially due to added tax deduction advantages.|