The goal of any real estate investor is to earn as much as possible with minimal risk. Only if you know how to make smart choices will you be able to achieve this. Luckily, if you know the three things that indicate a great real estate investment, you are a step closer to achieving that.
First, you need something with a good return. Real estate is an illiquid asset that require you to take money out of your liquid assets. You need to strive to get a return rate that is the same as what it was on your liquid assets. Basically, you must find good cash flow properties, not money pits.
In terms of real estate, therefore, you should look not for appreciation but rather for cash flow. Calculating your cash flow means you need to work out how much money from your rental is left after you have paid for all the necessary expenses. What you should do is leave your cash flow alone, and keep that as savings as much as possible. Plus, your cash flow can increase as rent prices go up over time. Best of all, your mortgage payments should stay the same. You should be looking at a cash flow of at least 20%. There are a number of free to use cash flow calculators available online and you should use these at much as possible.
Another option you have is to invest through a real estate investment trust (REIT). REITs are popular because they are cheaper to get involved in, but the returns you will see are not as high either. When you sign up with a REIT, your money is invested in real estate corporations. Hence, you could invest in anything from an apartment block to a retail park. You can find out how well your money is performing through the NASDAQ and stock exchange. A REIT, essentially, is like a mutual fund that only looks at real estate. You do need to think about a few things before you invest in a REIT. First of all, look into what the economic conditions are of the areas of key holdings. Also look into the performance history of the REIT. Additionally, their future plans are very important. Find out who the manager is and what they history is. A final thing to look into is the state of the current real estate market and how this will affect the performance of the REIT.
There is lots to think about if you want to buy or sell a home. Although it is now possible to do everything online, it is still better to find a good realtor to work with. Let’s explore some of the things you should and shouldn’t do when picking a realtor.
Make sure you find out whether anyone can personally recommend a realtor. However, don’t let someone else’s opinion be the determining factor. Spend some time properly researching as well. You must ensure that you find a realtor that specializes in your field of interest. You shouldn’t look for someone that sells apartment blocks if you are looking for a beach house. Next, make sure you speak first to potential realtors before you hire them. Ask anything that is relevant, such as how they will represent you, what they can do for your, what experience they have, how much they cost and so on. You also have to make sure that your expectations are made clear to your realtor. They must understand your needs. Finally, make sure that you actually get along with your realtor. If not, you will find it hard to trust them. The last thing is that you need to find someone that is very experienced. Although you might want to help out someone who is just starting in the world of real estate, would you really trust them with the thousands and thousands of dollars involved in these transactions?
Once you have looked into experience, you must review the realtor’s reputation as well. It is easy enough to find a realtor that has a really bad name, unfortunately. Luckily, a few tools are available to you in order to find a good realtor. The Better Business Bureau website is one really good tool to tell you how well they have operated in the past. Social media is another tool out there that can tell you a lot. It is almost impossible to hide an opinion, good or bad, once it has appeared on social media. Make sure you also speak to people you know and find out whether they have an opinion on the matter. If you do hear a complaint, however, make sure you find out whether that is a relevant complaint to you, and how the realtor reacted in response to the complaint.
If you are selling, you are likely to have to sign an exclusive realtor agreement. It is completely normal to do so but does not affect any regular rights you have. For example, if you realtor does not represent you properly, you can always terminate the contract. All the contract really prohibits is for you to work with more than one agent at the same time. You are not obliged to sign this type of contract if you want to buy. However, there are now more and more realtors who do request it. The final thing you must look into is how your realtor earns their living. Realtors can earn their money in a variety of different ways. In most cases, you will find that a realtor is paid a commission on the final sale price of the property, but some work on flat fees. You need to work out which of the two constructions your realtor will use before you agree to work with them.
In order to sell your home for top money, you need to invest a bit of time. With time, you can not only fix some of the problems your home may have, you can also learn about real estate. Those who know about real estate usually fair best in this world. Some of the hints and tips collected by real estate professionals to help sell a home for top dollar are outlined below.
First and foremost, ask yourself why you are selling your property. Motivation is important because it allows you to determine how many resources (effort, money and time) you want to invest as well. If your motivation is a quick sale, you will work differently than someone who wants a huge profit.
The next step, naturally, is to have the interior checked. Of course, you must make sure the whole house is clean and tidy. Don’t hang up air fresheners or light scented candles all over the place. As much as you may enjoy the scents, other people may not feel the same. Furthermore, heavy artificial scents may make potential buyers suspicious, making them think that you are trying to cover up something. Next, make sure you take care of clutter. As much as all your pictures and nicknacks may be special to you, other people don’t really want to see them and it prevents them from really seeing your home as well. You need to make sure your property looks as big as it possibly can do, which means you need to get rid of items as much as possible from your walls, shelves, floor and so on. The exception to this rule is the mirror. Mirrors create a false sense of size, making your home look bigger. Also, you do have to make sure that there is something on your walls somewhere, otherwise it will make your property seem hollow. Try things out a little bit, seeing what works and what doesn’t, and use your own common sense to get it right.
Lastly, you have to get all your cleaning gear out. Make sure every surface has been cleaned properly. This is the time to really get the elbow grease out and to get rid of clutter, which you need to do before you move anyway. You need to transform your home into a show home. This means you need to look at the outside of the home as well. Clean your yard, mow the lawn, get rid of weeds and prune your trees and bushes. It is your property’s exterior that will create that important first impression. Only one opportunity is ever given to create a first impression. Hopefully, these tips will help you to sell your property as quickly as possible for the best price.
It cannot be denied that mortgage interest rates are very low at present. Additionally, home prices are still low as well. This does not, however, mean that any home is bargain waiting to be snapped up. The market currently favors the buyer. However, never buy a property without having researched it. The potential issues you may uncover when researching a property could be serious. Some problems can be fixed, of course, but sometimes you should just move on. There are two factors in particular to be aware of.
The first thing is that you must think twice before you purchase a “fixer upper.” These properties are often very cheap, which makes them very attractive. Many of us believe that we have sufficient DIY skills to fix up such a property. However, you are likely to find that only qualified professionals are able to actually fix the problems. The price you pay for these professionals may be a lot higher than you had budgeted for initially. Secondly, be very careful of properties that have clearly had DIY adjustments. People may have done a really good job, at least cosmetically, but the reality is that it may be saddled with problems.
Next, it is time to look at how the property was treated by the current owners. Check the property for maintenance as well. If you find that the owners haven’t look after the outside properly, the inside is likely to be the same. Also, look at the wiring. You are not likely to be an electrician, but there are certain things you can easily notice yourself. If you spot that outlets are warm or that lights flicker, there is likely to be a wiring problem. If you notice that only a few of the walls have been painted recently, it is possible that the owners are trying to hide something. Check the windows. If there are signs of condensation or windows don’t open properly, it could be a sign of serious damage that will cost you a lot to repair.If an owner declares certain rooms as “off limit”, then go find a different home to buy. If any structural work has been done on the property, you need to make sure that it was done by someone who was fully qualified to do this.
When it comes down to it, you are the only person who is able to decide whether or not to buy that property. But do make sure to exercise due diligence. You should never purchase a property that you didn’t have reviewed by a professional inspector. If any issues are found, it is up to you to decide whether you then want to step away from the property, or whether you want to use it as a bargaining tool to bring down the price. However, always be careful that you do not get tied into a money pit.