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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: Time 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. Networking 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. Financial Preparation 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. Cameron Brown is an internet marketer specializing in ranking automation. For information on Investment Property, visit Security National Capital.
MORE RESOURCES: Blackstone's Beleaguered Real-Estate Fund Stems Exodus The Wall Street Journal Judge Approves $418 Million Settlement That Will Change Real Estate Commissions - The New York Times Agencies' headquarters in DC remained 'nearly empty' in 2023, real-estate board finds Federal News Network Charlotte County cash buyers bolster mixed real estate market Gulfshore Business Real Estate Taxes Due, Wednesday, May 1 | Boxford MA Boxford MA | Manhattan Real Estate Update: "Embrace the Boredom" westsiderag.com Commercial Real Estate Pros On the Finance Market: 'Not a Typical Cycle' – Commercial Observer Commercial Observer Pinellas Beaches Real Estate April 11-19 The Gabber Newspaper Atlanta Real Estate Investor's Sales Pitch Is a Curveball: Lease Office Space, Become Co-Owner CoStar Group The Folly of China's Real-Estate Boom Was Easy to See, but No One Wanted to Stop It The Wall Street Journal Top Payment Trends in Commercial Real Estate: A talk with JPMorgan Chase's Lisa McDonnell Commercial Observer Reversing the Real-Estate Doom Loop Is Possible. Just Look at Detroit. The Wall Street Journal The agency imperative to manage real estate more effectively Federal News Network Bill Vanderstraaten, Scott Rohrman to join North Texas Commercial Real Estate Hall of Fame The Dallas Morning News Banks Believe They Are Well-Prepared for Commercial Real Estate Fallout The Wall Street Journal Kanye West drops price of Malibu estate from $53 million to $39 million San Francisco Chronicle Letter to FERC: TDP real estate ad sparks Cheat Lake resident's concern about removing Cheat Lake land from federal ... The Dominion Post Real Estate Sales Include Two Falconer Commercial Properties Jamestown Post Journal REAL ESTATE | Open House event April 25, 2024, at Love Hope Faith Home in West Bend, Wi | By Charmaine Brea washingtoncountyinsider.com Commercial Real Estate Financiers Pivot Plenty in Changing Debt Market Commercial Observer Great week for Prodea Real Estate Investment Company Société Anonyme (ATH:PRODEA) institutional investors after ... Simply Wall St ACCENTRO Real Estate AG (ETR:A4Y) Stock's 31% Dive Might Signal An Opportunity But It Requires Some Scrutiny Simply Wall St Alternative Lenders Help Fill Commercial Real Estate's Debt Gap Commercial Observer CoStar eyes virtual reality as integral player in future real estate deals - Washington Business Journal The Business Journals Is The Housing Market Going To Crash? Bankrate.com 10 Real Estate Charts Showing What's Next for Housing: Ivy Zelman Business Insider REAL ESTATE SPLIT CORP. Completes Overnight Offering Yahoo Finance Former HGTV star gets jail time for real estate fraud WDAF FOX4 Kansas City 21 Largest Real Estate Companies in the World Yahoo Finance Spring remains a seller’s market in Nashville WKRN News 2 Fed Report Warns of High Risks in Real Estate and Housing Norada Real Estate Investments Annie Leibovitz just listed her rural California estate for $8.995M Business Insider Inside Bill Gates' real estate, from his Seattle to Florida houses Business Insider Brazil launches public consultation on charging real estate tax on concession assets BNamericas English Macomb County real estate transfers recorded Nov. 27-Dec. 1, 2023 The Macomb Daily Eliza Solender hosts President's Tea to empower women in real estate Preston Hollow Advocate Big bill comes due for Martin Selig, giant of Seattle office real estate The Seattle Times Real Estate Split Corp. Class A Distribution Yahoo Finance Real estate 2024: Emerging from the storm? White & Case LLP Airwavz Partners with Nuveen Real Estate to Redefine the Wireless Experience in Commercial Real Estate StreetInsider.com The Real Estate Agent Pledge: The Jason Mitchell Group's Commitment to Transactional Transparency and Fairness RisMedia.com New CRE Clients Enter The Picture During Year of Dislocation Commercial Observer REAL ESTATE | American Construction Services & American Architectural Group receive 1st Place 2024 American ... washingtoncountyinsider.com Y Combinator alum Matterport is being bought by real estate juggernaut CoStar at a 212% premium TechCrunch How Alexico's $180 Million Deal With St. Francis College Fell Apart The New York Times Naples real estate: Fewer sales, higher insurance. What is happening? Naples Daily News These are the 10 best places to live in Massachusetts, according to real estate experts Boston 25 News Cleveland's KeyBank Real Estate Capital names Midwest regional production manager – REJournals REjournals.com Brandywine Realty Stock (NYSE:BDN): Good Value in Challenging Real Estate Market - TipRanks.com TipRanks Washington County Real Estate Transactions NYVT Media Elizabeth Herremans takes her Eagles connections to Serhant - Philadelphia Business Journal Philadelphia Business Journal |
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