The secret to profitable investing in real estate is the ability to see
profits where others see problems. Evaluate every potential property with all
the possibilities in mind. Think outside the box - don't even consider homes
that are in good condition. Homes that don't need immediate renovation (handyman
specials), are in high demand, and high demand means high sale prices and
low profit potential for you. You need to be looking for the homes that no one
else wants.
Become an area specialist
Choose a geographic area to work in and find out everything there is to
know - schools, shopping and especially how much houses sell for. Specializing
in one area is the secret to finding great bargains. The more you know about
the area, the quicker you can spot the bargain when it comes along.
Go for affordable neighborhoods
There is a larger market for lower priced homes. Renting or buying an
expensive home is not an option for most people. It's true that more expensive
homes have a higher profit potential per house. But you also take on a higher
risk of not finding a buyer or tenant right away.
Homes in expensive neighborhoods cost more from beginning to end. Expensive
homes are also more sensitive to swings in market conditions. And finding a
fixer upper in an expensive neighborhood is an extremely rare occurrence.
Find the right neighborhood
On the flip side, you don't want to invest in a run down neighborhood
either. Most people live in high-crime, run down neighborhoods because they
must, not because they want to. Would you buy a good home in a bad
neighborhood?
The ideal neighborhood has a history of rising property values - this
indicates demand. If you can supply a gorgeous home in ready-to-move-in shape,
you'll have an ample supply of buyers. You should also look for other homes
that are being upgraded - this signals confidence in the neighborhood.
Finally, look for a low ratio of renters to owners.
Select the right property
Look for a home that blends in well with the neighborhood. Don't go for the
odd house that's out of character. Next, stay away from properties that need
major structural repairs. You're looking for something that needs a cosmetic
rehab. Major repairs are expensive, time-consuming and eat away at your
profits. Your goal should be maximum upgrade at minimum cost so you can profit
and buy your next property.
Consider minor layout changes
Generally, you should avoid properties with impractical or just plain bad
layouts. At the same time, if you can improve the layout with some minor,
relatively inexpensive changes, you could realize a lot of extra profit with
only a little extra work.
Save money with inspections
Remember, you are making a significant investment. You should make the
final deal contingent on a satisfactory inspection. The inspection will either
confirm that no major structural repairs are needed, or it may highlight
problems that kill the deal. A few hundred dollars for the inspection could
save you thousands.
Handyman
specials are without doubt the best properties to invest in. You can buy
them at an attractive, below market price and quickly add value with a few
minor repairs. But these opportunities won't come to your door. You have to
find a neighborhood and make it your second home until you know what
properties are worth and why people want to live there. Then you'll be able to
spot the handyman
specials as soon as they become available.
About the Author
Discover exactly how Sal Vannutini combined two of the easiest (yet
brutally powerful) real estate investing strategies and made an insane $31,510
Profit In Just 49 Days... And How You Can Do The Same!". Visit http://www.FixerUpperFortunes.com