Before you Buy an Investment Property…!
Investing in Real Estate is a great way to create income. Of course, you can make plenty of money but you can also loose money if you are not very careful. When considering a purchase, consider all the costs associated with that purchase and owning that property. And always add a buffer. Guess low on profit and high on costs.
- Cost of the property
- Cost of financing
- Reoccurring expenses (Mortgage, Utilities, Insurance, Association Fees, Assessments and Property Taxes)
- Repairs, Maintenance and Remodeling expense (Interior and Exterior).
- Advertising for Tenants
- Accounting (Capital Gains, Bookkeeping)
- Expenses to resale if that is what you plan to do.
Financial Planning is the key to a successful Investment.
Opinion of Value. Have an experienced Agent or Appraiser provide you with an Opinion of Value or Appraisal. Be pro-active! Review any information that they provide you and do get a second or third opinion. Don’t worry about hurting anyones feelings. This is your investment only if you do this right.
Complete a Home Inspection. Know what you are Buying Inside and Out. A thorough home inspection should be completed. Obtain a total cost to make any and all repairs and improvements.
Accounting. Create a spreadsheet with all of your estimated costs. Create a duplicate to include your actual costs so your can compare. The first investment is usually not a profitable one for most. Most chalk it up as a good learning experience.
It pays to have an Experienced Real Estate Agent as a part of your team. He/She can help you find the right properties to purchase and can provide you with a wealth of information being a very valuable part of your transactions. I have helped many people become Investors and I would love to assist you also.
Be a smart investor and follow the rules. Do not Buy based on emotion. If the numbers do not work. Don’t walk away….RUN!