Learning how to buy investment property is a skill that over time will be sharpened and perfected.
You may think it's as easy as seeing a property and then buying it.
The process is a little more in depth than that.
When deciding which property to purchase, you must go through a number of steps and have your predetermined criteria in place.
Over the years I've developed a mental checklist of things I look for when I'm about to make a purchase.
I want to share this checklist so you can use my methods to buy investment property successfully.
First, consider what type of property you're in the market to purchase.
You may be looking for a quick flip or a long term rental.
Once that is determined, I consider the location of the property.
If I'm in the market for a quick flip I have to make sure the area will support an easy resell.
If it's a rental I'm considering, the area can be low to moderately priced.
In addition, I must determine if the rent and location can generate income, and support all the costs required to complete the project.
You need to know what you're looking for so you can choose a location that best supports your vision.
Next, I'll take a close look at the property.
How much work is needed to complete all the repairs? Are all the major utilities present and in working condition? Is there any structural damage to the property that would be a costly repair? Are the costs of the repairs going to cause this project to no longer make monetary sense? Will these repairs make the project last too long, which will have a direct effect on my bottom line, COST? All of these questions have to be considered to determine the viability of the project.
You don't want a price tag so high that it will break your project.
Lastly, I'm going to look at my subcontractors.
Who will be a good fit for this project? Will they help keep the project within budget? Will they be able to complete all repairs based on my deadlines? If not, I could incur additional cost.
Additional costs would include making payments on the loan for purchasing and repairing the property, paying taxes with every passing quarter and accruing monthly utility bills.
The longer the project continues, the longer these bills are not offset by the rental income.
It is imperative that the project stay on schedule and your subcontractors stick to the deadlines provided.
As you can see there are many questions to be answered when attempting to buy investment property.
I know it seems like a lot, but once you have your list of questions it makes it much easier to keep things straight.
You can take my list and tailor it to fit your particular situation.
There are always different questions that apply to different projects.
I answered some questions that will apply to every project, but you'll have additional ones that pertain to your specific property.
Now you're ready to go buy that first property and feel confident that you won't make any huge mistakes.
With time, as I stated, you will sharpen and perfect your skills and become a pro at buying investment properties.
You may think it's as easy as seeing a property and then buying it.
The process is a little more in depth than that.
When deciding which property to purchase, you must go through a number of steps and have your predetermined criteria in place.
Over the years I've developed a mental checklist of things I look for when I'm about to make a purchase.
I want to share this checklist so you can use my methods to buy investment property successfully.
First, consider what type of property you're in the market to purchase.
You may be looking for a quick flip or a long term rental.
Once that is determined, I consider the location of the property.
If I'm in the market for a quick flip I have to make sure the area will support an easy resell.
If it's a rental I'm considering, the area can be low to moderately priced.
In addition, I must determine if the rent and location can generate income, and support all the costs required to complete the project.
You need to know what you're looking for so you can choose a location that best supports your vision.
Next, I'll take a close look at the property.
How much work is needed to complete all the repairs? Are all the major utilities present and in working condition? Is there any structural damage to the property that would be a costly repair? Are the costs of the repairs going to cause this project to no longer make monetary sense? Will these repairs make the project last too long, which will have a direct effect on my bottom line, COST? All of these questions have to be considered to determine the viability of the project.
You don't want a price tag so high that it will break your project.
Lastly, I'm going to look at my subcontractors.
Who will be a good fit for this project? Will they help keep the project within budget? Will they be able to complete all repairs based on my deadlines? If not, I could incur additional cost.
Additional costs would include making payments on the loan for purchasing and repairing the property, paying taxes with every passing quarter and accruing monthly utility bills.
The longer the project continues, the longer these bills are not offset by the rental income.
It is imperative that the project stay on schedule and your subcontractors stick to the deadlines provided.
As you can see there are many questions to be answered when attempting to buy investment property.
I know it seems like a lot, but once you have your list of questions it makes it much easier to keep things straight.
You can take my list and tailor it to fit your particular situation.
There are always different questions that apply to different projects.
I answered some questions that will apply to every project, but you'll have additional ones that pertain to your specific property.
Now you're ready to go buy that first property and feel confident that you won't make any huge mistakes.
With time, as I stated, you will sharpen and perfect your skills and become a pro at buying investment properties.
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