via Forbes Real Estate Council
Is 2018 the year you will buy a new home or investment property? Are you starting to window shop and find yourself looking at everything from private financing to custom cabinetry? Before you rush into a buying decision, make sure you understand a few core concepts smart real estate investors make prior to buying an investment property.
Consider the following real estate tips and you can’t go wrong.
• If you have found a home you are interested in purchasing, drive through the area in the morning, afternoon and at night. Understanding the character of the neighborhood is crucial if you want to make a wise real estate investment decision. While a community might look charming during the day, it can have a completely different vibe at night. Look for signs of trouble like bumper-to-bumper traffic during school hours or questionable characters roaming the sidewalk after dark. The more you understand the overall feel of a neighborhood, the better positioned you are to make a smart real estate purchase.
• Dig into details on schools in your preferred area, regardless of whether you have children or not. Find out how the schools are rated as compared to others in the district and whether there are ongoing issues with enrollment. It’s very important to remember that potential buyers with children will want a home near top-quality schools. The better the schools in your area are, the higher price you are likely to receive for your renovation project.
• Before you hire a real estate agent to help you find homes to purchase, make a list of your must-haves. For example, homes that are distressed in specific zip codes and school districts are a great start. Next, get repair estimates from licensed contractors to determine how much capital you’ll need to invest in the home for renovation. Finally, compare your findings against your total allowable budget and eliminate those renovation projects you can’t purchase. It is easy to overspend when shopping for real estate flips, especially in a seller’s market. The deals you’ll see when searching for a property can be incredibly tempting, especially when there are other parties interested in purchasing the flip. When you understand what you can and cannot purchase from the very beginning, it is easier to say no to the temptations of real estate buying and focus on the basics.
• Don’t be pressured by hot market conditions to make a real estate purchasing decision before you are ready. If you miss out on a coveted property, there will always be other homes for sale when you are prepared to decide on a listing. Bidding wars can be costly and cause you to regret your purchasing decision for years to come. I see new investors make this mistake in a seller’s market all the time. Say no to the pressure! Remember to take your time and work with a top-quality real estate agent or real estate wholesaler who doesn’t pressure you to buy, regardless of the market conditions.
Buying an investment property, whether your intention is to flip it or keep it as a rental, is likely to be one of the largest investments you will ever make. Knowing what to do and what not to do is crucial if you want to feel good about your purchasing decision. Remember the above-listed real estate tips and your chances of making a wise decision and financial success will increase significantly.
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Forbes Real Estate Council, Abhi Golhar