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Last Updated: May 14th, 2012 - 22:24:01 |
One vital key to expertly searching for investment property to use as rental income generating property is to START IN “THE OFFICE” and to FINISH IN THE OFFICE. That is right, you probably are guessing that I mean the office of the commercial real estate brokerage or the mortgage brokerage; however, your search begins and ends IN YOUR OWN OFFICE, whether it is at home or in a business building. You must begin WITH YOUR OWN RESEARCH AND PAPERWORK before you can expect and inspect anyone one else who you want to obtain in assisting you in your search. If they think that you are a lazy thinking buyer of investment real estate, then they will make a fast and lazy dollar off of you every time. They will do as little research and legwork as they can to get your money. Yes, research and legwork are the two keys to making rental cash,
The second key location in your search for investment properties that are perfect rental property is “The Field.”. This article will focus on THE FIRST AND LAST STEP, that of DOING THE PROPER RESEARCH IN THE OFFICE. To help you start out as a successful landlord owning profitable rental properties, I have outlined a few different steps you should take for success. These are only reminders to the seasoned buyer of rentals. Yet, we all need REMINDERS and maybe should POST THIS LIST ON THE WALL IN YOUR OFFICE.
1. GET YOUR MONEY ORGANIZED. Go through all of your finances thoroughly to make sure that they are all ready to go. If your plan is to take out a home equity loan to finance your real estate investment purchase, always make sure that you HAVE YOUR CREDIT REPORT CLEAN CONTAINING NO INACCURACIES. This will help your probability of receiving approval and qualifying for favorable interest on your mortgage rates. Also, find some worst-case scenarios before you finalize your resolution to buy investment real estate. What if you are not finding sufficient renters to fill your property? Will you still have your payments?
2. Now, you are ready to LOOK FOR BOTH MORTGAGE LEADS AND look for your ACTUAL RENTAL PROPERTY LEADS. I say leads because you are still in the office, although now it may be your local real estate franchise’s office. Get enough leads to search for one or two weeks. Pick out three or four of the best ones and have the comps printed for them.
3. DO NOT OVERPAY. Now, assuming you have the best mortgage rate and are standing by to make your offer. Your acquisition needs to distribute a sufficient profit margin, regardless of whether you have full occupancy or you do not. Or else you can wind up losing money rapidly instead of collecting a profit. DO NOT RUSH YOURSELF TO BUY to try and prove something to somebody. MAKE SURE of your real estate franchise.
4. GET IT INSPECTED. If possible, check on the homeowner insurance policy of the previous owner. This may turn up something that the new inspectors missed or that has been hurriedly patched up. Them, have the prospective investment property thoroughly inspected prior to purchasing. Make sure the electrical wiring meets and exceeds code, that your paint does not contain lead-based coats, and that the entire environment is safe for even toddlers as well as tenants. Inspections can bring to light hidden problems that may prevent future refinance mortgages or even close you down costing thousands of bucks before you can reopen. Although you may possibly be required to shell out for the inspection, it very well might save you masses of money when put side by side with paying for unanticipated home remodeling.
5. PRINT A COMPETITIVE ANALYSIS. Commercial mortgage leads are a dime a dozen. Do not waste time riding by for sale signs or checking the mortgage leads in the local newspapers until you have printed comps for and walked inside your 4 or 5 best valued Investment Properties each week. Scour that multiple listing service for 4 or 5 each week to evaluate all of the current properties in your market. Also, ask your Real Estate Broker to provide you an analysis of the comparable properties that were sold in the previous two years, with data for the rental income, the sales price, listing the number of unites, the square footage, and all other relevant factors.
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