If you have been thinking about investing in real estate, you might be wondering if you are ready to take the plunge into unfamiliar waters. The truth is that you need to be prepared and do your homework before you make a real estate investment. There are many different things to research before you buy.
Location is Most Important
There is no substitute for a great location. Don’t waste your money investing in an area that no one wants to live in, or you will never get your money back. Make sure the real estate you buy is in a good school zone, an area that attracts buyers, or an up and coming area that seems to be bringing in new people. For example, Rancho Pacifica is a safe neighborhood with great schools and community activities and therefore a desirable location for buyers. It doesn’t matter how great of a deal you can get in a bad location; you still won’t make any money. A great way to get your money’s worth is to invest in smaller or older homes in great neighborhoods. These will sell fast because people always want to get into quality neighborhoods that they otherwise may not be able to afford.
Another thing you need to consider is how much it will cost to make any needed repairs to the home. Always have a home inspection performed before you make a real estate purchase to alert you of any problems with the home. Take into account how much you will have to invest in the home past the purchase price to make repairs. This can eat into your profit if you don’t budget for it first.
Research Nearby Property Values
Before you purchase, research the property values of nearby homes to make sure you are actually getting a good deal. Investing in real estate means that you have to buy at much lower prices to be able to make a profit. You can ask real estate experts to help you find the property values you need, or you can look it up yourself on the city or county’s real estate website. Look at recent trend and tax values to see if the home values in the area are going up.
Think Like a Buyer
Before you invest in real estate, preview the property as a potential buyer. If you were looking for a home, what would the house need to look like? While you may have personal tastes and ideas, if your idea is to resell the home for a profit, you have to appeal to a broad range of buyers. This means that any remodeling and repainting should be done to attract buyers. Choose conservative colors and styles.
Is the Style Right?
Finally, the trend in real estate right now is for buyers to buy homes they connect with, so look at the overall style of the home. There are many young, first time buyers who are looking for contemporary style homes. Will your investment fit the bill?
Being prepared and doing your homework can help you make a good real estate investment that will pay off in the future.