How do I find a good real estate investment?

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Answered by: ANGELA, An Expert in the Investing in Real Estate Category
When considering a good real estate investment, there are several factors to take into consideration. Planning is the most important. Working with professionals is recommended in order to help you make the best decisions for your desired outcome. However, if you do not choose to work with a buyer’s real estate agent, there are a few things you should first establish that an agent as well as your accountant will help you do. The first thing is to determine how much you have to invest, and how much time and effort you are willing to put into your investment.

The next question is how long do you plan to hold your investment for? Consider a situation such as an undeveloped property which requires zero repairs and a long holding time versus an existing home or commercial space which requires maintenance but has the potential to produce revenue. Many different scenarios may come from each property which is why planning is so important.

Short term real estate investments carry very different federal tax implications than long term real estate investments. You should consult your accountant or a tax professional about your individual needs before deciding which to pursue. Keep in mind that real estate investment is a caveat emptor situation (buy at your own risk). Careful planning is a must for a successful transaction.

Once you have determined what suites your needs the best, you should do some investigating about the real estate market you want to put your money into. Take a look at land values compared to properties with structures, otherwise referred to as ‘improved’ property, in order to have an idea of what kind of values are present in the area. If you find something that interests you, keep a list to track your interests and the companies that represent them. Do some research on the agents and real estate companies to be sure they are ethical and will represent facts.

A good buyer’s agent takes the work out of negotiating and researching properties and has access to good investigational resources. A good agent will also help keep you grounded and focused on your investment objectives by looking for the best value and return for your dollar. If you choose to work with the representing agency only, your representation is limited according to the laws of your state and may not ensure your best interests. When determining what a good real estate investment is, research is ultimately your best assurance of success.

Once you are ready to make an offer, be sure to use professionals during what is referred to as the due diligence period to fully inspect and investigate everything from structural integrity, to municipal services and possible permit issues. The due diligence period allows you to take a closer look at the potentials of your investment. Hiring the right people for the type of investment you pursue is the single most important element of all. Never ever be afraid to walk away from a bad investment.

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