Buying your First Property
04/11/2013
Buying a property can be a very lucrative endeavor. It can also be a gamble; first-time buyers can often make mistakes that can result in a loss instead of a profit. While buying a property can be a complex process, taking the time to learn all you can about ensure your success. The following 8 tips will get you started on the right track to a successful purchase.
- Seek professional advice. Before making any final decisions, always consult the professional opinion of an attorney, accountant, and real estate agent. They can help you make sound financial and legal decisions, thereby avoiding any financial or legal disasters.
- Decide what you are looking for. Whether you’re interested in purchasing a house to flip, an apartment building to provide you with residual income, or a warehouse to start a business, it helps to make a list of exactly what qualities you want. For example, do you want to frame or block construction? How about a certain number of bedrooms? Are you looking for minimum square footage?
- Decide on a property type. There are many types of Properties: vacant land, rental properties, commercial properties, industrial properties, and even entire communities. A real estate agent can provide you with pros and cons of each type of property, and an accountant can give you sound financial advice. Perhaps the easiest choice for a beginning property is a rental property; a house or apartment building each offers the best potential for ongoing income.
- Research financing options. In light of the current housing crisis, lenders are cracking down on loans. Typically need to have a 50% down payment before any conventional lender will consider providing funds. Hard Money loans or Bridge Financing is a good option for buying properties. These loans typically come from private individuals and are not subject to the strict qualifications of banks/FHA financing. Knowing what your credit looks like prior to beginning the process of buying a property will greatly increase your chances.
- Decide where to purchase the property. If you’re looking to purchase a rental property, you will want to make sure it is in a location that has job opportunities and attractive features for tenants. Choose a low-crime area with shopping, good schools, public transportation, and other tenant-attracting amenities. You will also want to either buy something near enough for you to drive to or where you can hire someone to take care of your Property Management.
- Research the area. It’s important to know the typical property values in the area, as well as how much other property owners in the area are charging for rent. Talk to local real estate agencies, and other rental owners to get this information.
- Analyze the property. With each property, you find that meets your requirements, research its potential: how much will the property rent for? What expenses will you incur to get the property ready for occupancy? How much time will you need to begin making a profit? You should inspect the property yourself as well as have a professional inspect it for any hidden problems.
- Make an offer. If you have found your perfect opportunity, researched it well, and discussed all the pros and cons with your professional advisors, it’s time to make an offer to the current owner.
Realnet can help make your search for property a success! We have listings for South Florida real estate foreclosures and property for sale.