Despite the recent real estate woes, real estate is still a good investment strategy when it’s part of a diversified portfolio. And investing in real estate can be fun. There’s a bit of an art and a science to finding the best investment properties. You’ll need time to research, a good plan and of course some expert advice on your side. Here’s what you need to know to find the best investment properties.
Build a network of support. Make friends with real estate agents, mortgage brokers, bankers and property managers. This network of people will help you find the best deals. Stay in touch with them, connect and share information, and offer tips for getting the best deals. They can also be a valuable source of information and expert advice once you find the property you want to buy.
Make sure your finances are ready to go. This way, when a great investment opportunity presents itself, you can jump on it. If you have to get your finances in order, get approved for a mortgage and gather the capital to make a down payment, you may miss the opportunity.
Know how much you have to spend and be able to quickly assess the value of a property. Know that depending on your goals for the investment property the value may change. For example, if you’re planning on owning the property for decades and renting it out, then you can take repairs and rental profits into consideration when evaluating where a property is worth the investment.
Make sure you also have your legal ducks in a row. If you’re buying a foreclosure home for example, you’ll probably want to have an attorney help you, a real estate agent and/or a mortgage broker because there will be some negotiating with the bank. This is a different process than buying from a traditional seller. And while it offers financial benefits, it requires some additional expertise.
Become an expert at scanning the for sale ads, searching the real estate websites and for sale by owner ads. Knowing what to look for will help you quickly assess the value of a property. Make a list of what you’re looking for, your investment goals and how much you have to spend. This will help you quickly narrow your search to only the best properties.
Finding the best investment properties requires patience, persistence and a firm knowledge about what you’re looking for and why. Make sure your goals are outlined in advance so you’re buying an investment property that meets your needs.