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Investment Property Part 2 of 2: What You Need to Know Before You Buy
Welcome to the second portion of a two-part series on investment property. In the first installment, "How Not to Become a Slumlord", we discussed a little of what it takes to own and operate a property as well as some of the do's and don'ts of the property management trade. In this second segment, we will be discussing some pre-investment principles that will help you maximize your ROI.
There are three basic principles of investment property that you should know before you buy an investment property in order to avoid overpaying:
How long do you plan on owning the investment property? As with stocks and bonds, the value of your investment may change significantly during the time you own it. While most real estate will appreciate in value over time, there are frequent fluctuations in the short-term market. If you plan on selling your investment property after less than five years, be prepared to accept the investment risk inherent in a shorter time horizon. This is especially true if you bought your property in an overheated real estate market. If this is the case, you could find yourself losing money if the market has taken a temporary downturn, especially if you've had to make major repairs to the property.
If you plan on owning the property for the next twenty to twenty-five years, it's almost certain that your investment property will appreciate in value. There's also a good chance, however, that you'll have to make major repairs like replacing the roof, wiring system, or major appliances like a water heater or refrigerator. Of course, these repairs will be offset by the fact that you've had/will have twenty plus years to recoup the cost. If on the other hand, you're only planning on owning an investment property for the next five years, buying a "fixer up'er" can eat up all the profits you would have made during your shorter investment horizon.
If you want the best deal possible on an investment property, than there are some people you'll want to be friends with. City hall clerks and bank employees may know what properties will be available on foreclosure and when they will go on the market. Real estate agents usually know everything real estate related within their respective territory. Some prospective landlords even run ads in local newspapers.
Many individuals interested in entering the investment property market may even join local landlord or investment property owners organizations. These types of organizations hold regular meetings where you can get the inside scoop on what's for sale in your area. The National Real Estate Investors Association is an online organization that provides a wealth of information and resources to potential investment property owners.
Get your finances in order. The less debt you have when you walk into your local lending institution, the better loan you'll get. This is common sense, but it's even more true for those seeking financing for an investment property. This is because lenders know that people are much more likely to default on a rental property than on their own homes. This means that the bank will demand a larger down payment and higher interest rates that you may have expected. It's also a good idea to have some extra cash left over to make unforeseen repairs should they arise.
By wisely choosing an investment property time horizon, making contacts in the investment property community, and preparing proper financial means, your investment may become a significant means of supplementing retirement and other savings accounts.
Uber Founder Turns Real-Estate Mogul for Ghost Kitchen Startup The Wall Street Journal
Recent Commercial Real Estate Transactions The New York Times
New York City real estate leaders talk about what they want in the next New York City mayor - Crain's New York Business
New York City real estate leaders talk about what they want in the next New York City mayor Crain's New York Business
PHIL HARDWICK — Your real estate questions answered | MS Business Journal | djournal.com - Northeast Mississippi Daily Journal
PHIL HARDWICK — Your real estate questions answered | MS Business Journal | djournal.com Northeast Mississippi Daily Journal
Chicago ranks 44th in annual 'Emerging Trends' real estate survey Crain's Chicago Business
Travis Kalanick cooks up a real estate empire The Real Deal
Fast-growing real estate firm Compass plans Memorial Green office Houston Business Journal
Whoever Wins the Presidential Election, It Won't Upend Commercial Real Estate Returns - Commercial Observer
Whoever Wins the Presidential Election, It Won't Upend Commercial Real Estate Returns Commercial Observer
Invesco acquires real estate debt assets, team from GAM Pensions & Investments
Growing S.F. brokerage Side aims to lure Bay Area’s top real estate agents - San Francisco Business Times
Growing S.F. brokerage Side aims to lure Bay Area’s top real estate agents San Francisco Business Times
3rd quarter Ferndale real estate market summary My Ferndale News
Tucson Real Estate: Arby's opens 11th local shop Arizona Daily Star
Top 20 Up & Coming Real Estate Professionals - NWM Yahoo Finance
BGL Announces the Acquisition of a Multifamily Real Estate Portfolio in Washington, D.C. - News-Herald.com
BGL Announces the Acquisition of a Multifamily Real Estate Portfolio in Washington, D.C. News-Herald.com
Midwest Commercial Real Estate Hall of Fame: Simon Jonna with Colliers International - REjournals.com
Humboldt County real estate: Inventory shrinks, prices climb Eureka Times-Standard
Commercial real estate firm Newmark Knight Frank rebrands San Francisco Business Times
Real Estate Insider: In the shadow of Little Caesars Arena, owner seeks eye-catching price for sliver of land - Crain's Detroit Business
Real Estate Insider: In the shadow of Little Caesars Arena, owner seeks eye-catching price for sliver of land Crain's Detroit Business
Fresno real estate enters the virtual realm The Business Journal
ORIX Real Estate Capital Changes Name to Lument Apartment Finance Today
Los Angeles Retail Real Estate Shows Slight Recovery Apparel News
Second Wave: What Real Estate Can Expect if NYC Goes Through Another Lockdown Commercial Observer
Legislators call for oversight of BMC real estate transaction The Hudson Reporter
Apartment Rents Are Plunging in the World's Richest Cities. It's Time For You to Negotiate - Bloomberg
Apartment Rents Are Plunging in the World's Richest Cities. It's Time For You to Negotiate Bloomberg
Brookfield Asset Management Inc. is exploring a sale of its life-sciences real estate portfolio - Crain's New York Business
Brookfield Asset Management Inc. is exploring a sale of its life-sciences real estate portfolio Crain's New York Business
Keith Cochran joins Michener Investments in commercial real estate Idaho Business Review
WS Development Partners With Fenway Sports Group Real Estate and '47 Brand for Development of Fenway Parcels - Boston Real Estate Times
WS Development Partners With Fenway Sports Group Real Estate and '47 Brand for Development of Fenway Parcels Boston Real Estate Times
Is medical real estate immune to COVID? Modern Healthcare
Hilco Real Estate Announces The Court-Ordered Bankruptcy Sale Of 17 Multifamily Properties On Chicago's South Side - Cherokee Tribune Ledger News
Hilco Real Estate Announces The Court-Ordered Bankruptcy Sale Of 17 Multifamily Properties On Chicago's South Side Cherokee Tribune Ledger News
Adaptive Reuse is the Future of Commercial Real Estate Commercial Observer
Norfolk County Real Estate Market sees sales numbers increase Wicked Local Weymouth
Bach Khoa Land Updates Information about Some New Real Estate Projects in the Saigon Region - Yahoo Finance
Bach Khoa Land Updates Information about Some New Real Estate Projects in the Saigon Region Yahoo Finance
Repurposing Real Estate Development to Counter Weakened Demand: Know the Risks Before Terminating Contracts - JD Supra
Repurposing Real Estate Development to Counter Weakened Demand: Know the Risks Before Terminating Contracts JD Supra
Real Estate Development in the Time of Coronavirus: Massachusetts – Update – October 2020 - JD Supra
Lebanon County real estate transfers for week of Oct. 19 Lebanon Daily News
Selzer-Ornst buys real-estate firm, consultant – The Daily Reporter – WI Construction News & Bids - Daily Reporter
Selzer-Ornst buys real-estate firm, consultant – The Daily Reporter – WI Construction News & Bids Daily Reporter
Real Estate Transactions Oct. 20 Sedalia Democrat
Texas Real Estate Agent Takes Home Staging to an Extraordinary New Level — and High-End Buyers Can't Get Enough - PaperCity Magazine
Texas Real Estate Agent Takes Home Staging to an Extraordinary New Level — and High-End Buyers Can't Get Enough PaperCity Magazine
Bargain Real Estate Chatham: $200K Drop In Price Chatham, NJ Patch
Hawaii industrial real estate market still stable in Q3, CBRE says - Pacific Business News (Honolulu)
Hawaii industrial real estate market still stable in Q3, CBRE says Pacific Business News (Honolulu)
Hudson Valley Real Estate Agents See Interest from NYC Spectrum News
Island real estate transactions - 10-21-2020 The Anna Maria Islander
September Real Estate Sales Shattered Records on Island - The Vineyard Gazette - Martha's Vineyard News
September Real Estate Sales Shattered Records on Island The Vineyard Gazette - Martha's Vineyard News
Butte real estate market skyrockets amid coronavirus KXLF Butte News
JV buys Maersk HQ building in New Jersey Real Estate Weekly
Developers pitch new rental projects north of UTD in Richardson The Dallas Morning News
Commercial real estate during a pandemic Vancouver Business Journal
Real Estate Crowdfunding in the Digital Age National Real Estate Investor
Some Real Estate Investors Are Putting More Money in One Basket The New York Times
Corcoran Group enters Arizona in deal with Valley luxury real estate brokerage - Phoenix Business Journal
Corcoran Group enters Arizona in deal with Valley luxury real estate brokerage Phoenix Business Journal
Modular housing joins Cleveland's real estate lineup Crain's Cleveland Business
Xinyuan Real Estate: Consider Staying The Course Seeking Alpha
The Agenda: Climate change’s flesh-eating bacteria; Charleston real estate breaks records - Charleston City Paper
The Agenda: Climate change’s flesh-eating bacteria; Charleston real estate breaks records Charleston City Paper
Distressed Real Estate During COVID-19: The Role of Intercreditor Agreements between Mortgage Lenders and Mezzanine Lenders - JD Supra
Distressed Real Estate During COVID-19: The Role of Intercreditor Agreements between Mortgage Lenders and Mezzanine Lenders JD Supra
Louisiana School Employees calls on 2 for real estate Pensions & Investments
Knock Home Swap comes to Orlando real estate market Orlando Sentinel
New York’s CRE woes could spread nationwide: investors The Real Deal
Good News COVID Trends in the Northern Colorado Real Estate Market North Forty News
CRE - Chicago Commercial Real Estate News ConnectCRE
Mears co-brokers commercial property sale in Federalsburg The Star Democrat
Real Estate’s guide to the 2020 election The Real Deal
Read the plan a commercial real estate firm used to reopen more than 300 offices worldwide during the pandemic - Business Insider
Read the plan a commercial real estate firm used to reopen more than 300 offices worldwide during the pandemic Business Insider
Real estate prices are about to drop 10% Fast Company
A challenge to real estate commissions gains ground Seattle Times
Industrial Real Estate Roundup: Property titans purchase, develop industrial warehouses - FreightWaves
Industrial Real Estate Roundup: Property titans purchase, develop industrial warehouses FreightWaves
Summit public health officials investigating virus outbreak at Cornerstone Real Estate Rocky Mountains - Summit Daily News
Summit public health officials investigating virus outbreak at Cornerstone Real Estate Rocky Mountains Summit Daily News
Houston real estate agent David Nettles accused of sharing explicit photos of 2 women without permission - KTRK-TV
Houston real estate agent David Nettles accused of sharing explicit photos of 2 women without permission KTRK-TV
Can't find recent Cuyahoga County real estate records online? Blame bed bugs - Crain's Cleveland Business
Can't find recent Cuyahoga County real estate records online? Blame bed bugs Crain's Cleveland Business
Supreme Court declines real estate case; City of Dearborn free and clear to market, develop parcel after nearly a decade - Dearborn Press and Guide
Supreme Court declines real estate case; City of Dearborn free and clear to market, develop parcel after nearly a decade Dearborn Press and Guide
Philly region’s hot real estate market continued through September The Philadelphia Inquirer
Real Estate Investing - So You Want to be a Landlord!
Is landlording the way to go if you are starting into real estate investing today?Receiving cash flow from rental residuals is an exciting idea. If the rental housing is congregated in large apartments within a focused area, the costs of management and maintenance are more economical.
Property for Sale in Piemonte Italy is Attracting British Interest
The Region has four distinct seasons but in general possesses a Mediterranean feel strongly influenced by the proximity of the Mediterranean Sea. Winters are short and cold (the snow and mountains providing spectacular scenery for the region's ski resorts).
Residential Property Abroad
It is increasingly common for individuals to own more than one property and in many cases the first investment after the family residence is in a holiday home. Whether you are buying a place in the sun, a country retreat or a city centre apartment, if it is in a foreign country you will be exposed to an unfamiliar legal system and to taxes in the country concerned.
Fantasy Gap [fast money in real estate]
I was in the rental business for seven-years, made 1.3 million dollars the first five years, got ill, and had to get out of it slowly, but had the money to do it.
10 Tips to Sell Your House Faster!
Here are some Handy wee Tips to help you Sell Your House Faster. These are all 'tried and true' tips we've gathered over years of Buying and Selling Houses, so I know for sure that they work!1.
Part 1: FAQ's From Media Interviews With Real Estate Author
Do you feel there is going to be a real estate bubble?Nash: No. Are some coastal and resort markets over-heated, yes.
Buy or Sell First?
When it comes to home buying, the ideal situation would be to find a new home, just as you receive an offer on your existing home. You would then be able to close concurrently and move into your new home a few days prior to closing on your previous home.
Late Mortgage Payments Sabotage PMI Cancellation
There's something you should know about PMI!Private mortgage insurance is commonly referred to as PMI. If a buyer makes a down payment of less than 20% of a home's value the lender will insist that a premium for PMI be added to every monthly payment.
I Already Have an MLS Listing, Why Do I Need an Internet Ad?
In today's real estate market, astute buyers are also looking to realize savings by dealing directly with the seller. They use internet search engines and keyword sets (Atlanta real estate advertising, Atlanta for sale by owner, Atlanta FSBO) to locate for sale by owner (FSBO) properties on the web.
European tax haven Andorra enjoys the same fiscal benefits as better known Monaco, adding to property demand from those looking for residency in a tax shelter as well as traditional ski chalet buyers who flock to the country between December and April each year.With the end of the ski season last month many ski resorts in Europe have closed up shop until early December with overseas property owners having little prospect of rental income in the summer months.
Buying Your First Investment Property
"Begin With The End In Mind"I first heard the phrase "Begin with the end in mind" in a Steven Covey book called "The 7 Habits of Highly Effective People". This expression makes a lot of sense because the fact is, you can't get where you're going, unless you know where you want to go.
Choosing An Estate Agent
With so many estate agencies vying for your business, choosing the right agency can be difficult. We have put together the following top ten tips to help you find and use the most appropriate estate agent to sell your house.
11 Different Ways to Participate in The New Millennium Real State Boom
Many parts of the country are going through a real estate boom. In recent reports real estate is showing double digit growth in many parts of the country.
The Listing Agents Role in Selling Your California Home
Advertising to the "Public"Every home seller likes to be assured that their listing agent and or their real estate company will run ads featuring their home. Newspaper ads range from color photo ads to lots of listings reflected on a page with primarily only copy.
What Is Home Staging And How Does It Help To Sell My House
Home staging is the concept of preparing a house for sale. This can involve everything from removing clutter, re-arranging furniture and in some cases re-decoration, ensuring that the house creates a great first impression and helps buyer's to feel that they could really live there.
Buying Country Acreage and Rural Properties, To Buy or Not To Buy
Almost anyone can become a rural property owner; if you are willing to set goals, establish what your purposes are, plan ahead and set targets that are all aligned toward the same result. And, if you can be patient instead of requiring instant gratification.
How to Use Design Psychology to Stage Your Home for a Top-Dollar Sale
A new business venture to help home sellers, home staging, assists property owners in preparing their home for the best possible sale. Home stagers visit your home and either tell you how to redesign it or actually do the work for you.
How To Sell Your Home FSBO
You decide to sell your home and believe you can handle the selling process. Good for You!Of course you're a little nervous and that's normal.
Real Estate Investing - Makeovers vs. Flipping
Please don't call it "flipping."Some real estate investors who practice the technique of buying property for immediate fixup and resale call it "flipping houses.
How To Spot A Good Buy
Beauty is in the eye of the beholder, particularly when it comes to buying a home. Features that attract one home-buyer may repel another.
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