In continuing our series on real estate investing, today we’ll be discussing two key points that will guide you toward the right investment property. The first is having a mission and vision, and the second is defining your property criteria.
To fulfill each of these two points, there are five steps you’ll need to take.
1. Know what your goals are. Decide how much money you want to make, how many properties you want to own, and how quickly you want to accomplish these things.
2. Set and prioritize your criteria. Of all the various points you may have on your checklist of the perfect investment property, one of the most important is location. Investors should mainly stick to properties that are within 30 minutes of where they live or work. It’s also a good idea to set your sights on “up-and-coming” areas rather than those that are already red hot. The most successful investors are those who can get in on opportunities ahead of the curve.
3. Find the right type of property. Single-family properties are great in terms of maximizing your net worth since they tend to appreciate well over time. Multi-family properties, meanwhile, appreciate less but generate a higher cash flow.
4. Check the property’s condition. Investors should purchase a property that has “hair on it.” Properties others might shy away from can be a great opportunity. It’s all about being able to see the value through the issues.
5. Be aware of fair market value and demand a discount. A good rule of thumb when asking for this discount is to aim for 10% less than the fair market value.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.