Have you recently obtained some money and are thinking about getting started in real estate investing? Are you wondering what sort of things you need to look out for when buying your first property? Investing in real estate can be a great way to grow your current income. Buying just one house today could lead to you owning several homes or apartment buildings in the near future. But there are still things that you need to avoid when looking at properties, lest you wind up losing money on the investment. Some of the most important things are:
Avoid "fixer-upper" properties: It can be tempting to purchase a property with a leaky roof, termite damage, or some other structural problem due to the low purchase price. Unfortunately, properties like this can be extremely expensive to renovate and the renovations themselves can take months. Instead, look for real estate that only has relatively minor cosmetic issues, such as outdated kitchen fixtures. The profit margins for reselling such a house will be lower, but you'll be able to get your money back much more quickly. In addition, the quick renovation time means that you'll be able to rent the house out sooner if you choose to do so.
Always keep location in mind: Who will you be selling or renting this property to? If you're buying real estate in a college town, always look for a property that's as close to the university as possible. If most of the households in the city have children, look for a house that's in a good school district. If you expect older buyers or tenants, being located as close as possible to stores and shopping centers may be more important than anything else. Remember that where you want to live is not necessarily where everyone else would want to live.
Get full inspections: When buying a house, it's common for the lender to want an appraisal inspection performed. This is always a good idea. But this inspection doesn't cover anywhere close to everything. Before you actually agree to purchase the property, have several professionals come out to inspect the property. This could be a couple of general contractors or you may want to have several separate plumbers, electricians, and roofers come out to give you their opinion. This obviously won't come cheap, but it can save you money in the long run. Having a sewer line inspection on a piece of real estate, for example, could save you from purchasing a house where the sewer line is collapsing and will need an expensive replacement before you can rent it out.