Real estate investment is an exciting field full of high risk, high reward, and plenty to consider. Here are the top-5 things to keep in mind whether you’re a newcomer or a house-flipping pro.
1. Location, Location, Location
It’s been said time and time again, but that’s because it’s true. Your property is only as valuable as the location. This means how far it is from work and play, but also the type of neighborhood it’s in. Surrounding properties can negatively impact the value of yours. If you buy a cheap house in the ghetto, renovations or not, you’ll have a hard time finding people who are willing to buy it from you.
Quality of location changes with time though, so do your research about local trends. Is the neighborhood growing? Is it in decline? Is there a new Starbucks around the corner? That’s usually a good indicator of growth whether you like their coffee or not.
You’re buying the location and value of everything around it. The cost of relocating a home – literally picking it up from the foundation – is astronomical, so don’t even entertain the thought. Choose the best location the first time.
2. Value Bathrooms
It seems arbitrary, but bathrooms have a big impact on homebuyers and renters. There’s a reason your first glance of a place is put in terms of xBedroom/xBathroom.
A 4-bedroom house may seem enticing, but if it only has 1 bathroom, you might want to reconsider. No one wants to wait for their morning bathroom time.
3. Do Not Overpay
You know that adage “buy low, sell high?” That’s all about profit. If you’re trying to make money off your property sale in the future, but overpay now, your profit margin is already lower.
You may be tempted to let a few grand slide at the time of purchase just to make the deal happen, but you’ll be scrambling to make it up when it’s time to resell. When you’ve reached your buying limit, turn around and look elsewhere.
4. Choose Tenants Wisely
That little old lady might seem like a worthy tenant at first, but always look deeper. This isn’t a deal to be made lightly when strangers are involved. Criminal records, credit reports, and even Google searches can cut out troublesome tenants.
That old lady who bakes her landlord cookies may also be cooking meth to support her bingo habit. You never know! Don’t leave this stuff to first impressions and biased perceptions.
5. Leave Emotions At The Door
Real estate is business. You can’t allow yourself to be swayed by every home with a view or tenant with a sob story. If you fall in love with every house you look at, you’re going to have a hard time separating yourself when it’s time for important financial decisions.
Letting your judgment be clouded by emotions can lead to any number of unfortunate issues. Repairs, stagnant markets, loss of money, and an overall huge headache once the honeymoon period is over. Look at the realities and lead with your brain, not your heart.
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The Hartley Law Group
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Chesapeake, VA 23322