Purchasing investment properties is serious business, a fact you’re well aware of whether you’re brand new to investing or a seasoned pro.
From determining whether a property meets your goals to finding properties in the first place, it can seem like an uphill battle. But it doesn’t have to be.
If you have questions, you’re not alone. Working with a real estate agent who has experience with investors will help you navigate the process.
In the meantime, here are seven of the most frequently asked questions and answers to help you get started.
Where do I find investment properties?
Perhaps the first thing investors ask is where to find properties to purchase. There are a number of ways you can find investment properties. One way is to simply do an internet search for sales in your area.
However, the best way to find investment properties suitable for you, within your budget, and maybe not even on the market yet is to work with an experienced real estate agent in your area. Real estate agents are the best source of information for investors, so save yourself hours of research and frustration and hire an agent to help you.
What risk factors should I look for in a potential investment property?
There are many pros and cons of real estate investing. Some of the downsides are worth considering before you select a property. For instance, if the property is already occupied, are the tenants notoriously unpredictable or disruptive?
You’ll also want to have multiple inspections done to make sure you won’t be spending thousands in restoration and repair before you can move your tenants in. Make sure all zoning and codes are upheld, look at the neighborhood and see if people are selling by the dozens or if residents enjoy living there.
All of these things are important considerations. The need for major repairs, disruptive tenants, undesirable locations, and properties not up to code are just a few of the risk factors to consider. Work closely with your real estate agent to avoid pitfalls.
How do I know if a property suits my goals?
It doesn’t matter how great the property you’re investing in is if it doesn’t help you reach your goals. Are you looking to purchase a rental property? Then having enough space to house tenants is important. Are you looking to flip houses? Then you don’t want to sign up for a house that requires lengthy and costly repairs.
Make a list of your goals and the property features that will help you achieve them, and seek those features out.
Should I invest in rental properties?
Whether or not you should invest in rental properties as opposed to flipping houses or another form of investment is entirely up to you and your readiness.
Are you good with people? Do you want to work with tenants and deal with middle-of-the-night emergencies? Are you happy to chase down rent that doesn’t come in?
These are all important considerations that will help you determine if you should invest in rental properties.
What are the pros and cons of turnkey properties?
Turnkey properties, or those that already have tenants and property management set up and are ready for you to take over as landlord, can be very efficient ways to get started in real estate investment. The name itself implies ease; just take the keys and take over.
The pros are that you have a ready-made, up-to-date property with tenants included, which saves you a lot of time and money. The biggest downside is that if you don’t know what you’re doing, it affects the current employees, all the tenants, and likely their families, as well.
Make sure you work with your realtor to discuss what you’re getting into before you go for a turnkey property.
Is house flipping lucrative?
The short answer is yes, it can be. However, like most aspects of real estate investment, how lucrative it is depends entirely on your preparedness. If you’ve done your research, worked with a real estate agent, and made a strategic plan, then you’re probably in good shape.
But if you’re just “trying it out” without any real strategy or prep work, it could wind up losing you a lot of money. Flipping houses can be incredibly lucrative. Just make sure you do your homework first.
How should I get started in investing?
The best way to get started in investing is to do your homework and work with an experienced local real estate agent. Only by partnering with an experienced agent can you truly ensure you’re making the right moves, considering all your options, and are on the path to a successful investment experience.
If you’re looking for investment properties but you’re not sure where to start, consider partnering with a Clever Partner Agent as a first step.
Clever Partner Agents are verified top performers in their local markets. What’s more, in states that allow buyer rebates, Clever buyers receive a $1,000 Home Buyer Rebate to put toward closing costs, down payments, and other related expenses.
Get in touch with Clever today, and we’ll introduce you to a Partner Agent in your area for a no-obligation consultation at no cost to you.