Invest in rental properties
Foreclosure City has created the perfect storm in many major US cities, which is to say the perfect storm for investors to find great real estate deals.
Large inventories, low interest rates, and homeowners eager to sell make certain cities ideal for choosing an affordable home or two. However, before you break your leg and rush out to buy that sale property, you’ll want to consider the most important factors in a successful real estate business.
Location, condition, price, and financing are all considerations you’ll want to make in order to successfully find and acquire a great real estate deal.
If you are looking to buy a rental property that will be paid monthly, then you may want to set your sights on the lower middle class areas. Most homeowners who occupy their homes in these areas keep their homes in good repair.
Although you’ll want to avoid the obvious signs of a bad neighborhood, such as boarded-up houses or gang graffiti, accessible transportation and signs of recent construction can translate to good income in rental properties. It is important to note that prospective renters with children will want to live in areas with good public schools. Neighborhoods where homes are similar in size and have similar amenities are also preferred, along with areas where homes are mostly three bedrooms, two bathrooms, or more.
Homes that are less than ten years old are more favourable, as most of their systems will be up to date, and they shouldn’t need major renovations for some time. If you’re considering a home that’s over 50 years old, make sure all the systems have been updated, from the wiring to the plumbing. If not, you are going to be spending a lot of money on repairs.
The ideal situation would be to buy a house that does not need repairs; however, there are plenty of homes on the market today that need major repairs, but can be purchased at rock-bottom basement prices. Many are owned by the lender and are uninhabitable. Others may need nothing more than a fresh coat of paint or new carpet.
If you decide to make an offer on a home that you think needs repair, be sure to make it contingent on a home inspection, along with an acceptable estimate for all necessary repairs.
The price may not be as easy to determine, as the sale of so many distressed properties has negatively affected the sales price of all homes in the area. However, it is necessary to sell the properties of the bank. Banks are interested in owning property; they are interested in making money from the property based on interest. Many have been willing to take a loss on property just to get rid of it.
Your goal on a bank property would be to offer 50 to 60 percent of the list price, depending on the condition of the property. The more work that needs to be done, the higher the discount you apply for. That will give you a starting point for negotiations.
Your last frontier to conquer in your investment is financing. Fannie Mae may be where she’ll want to start her search for financing. Also, she checks with her local lender. Mortgage brokers can often find you the best interest rate deals, and many of them can be found easily on the web. Just make sure they are trustworthy. Get all fees in writing before you sign anything.