If you are considering investing in property, here are 10 tips to help you to get off to a great start. Investing in property has fallen out of favor somewhat due to the recent downturn in real estate. However, this downturn has created both bargains for purchasing property and created more businesses and people that are needed to rent property. This combination makes it a great time for investing in property.
- Fix credit problems. Though buying investment property with cash is the best plan, most investors will be borrowing. The investor needs to do whatever can be done to increase their credit score to lesson borrowing costs.
- Use multiple banks. Developing a solid reputation at multiple local credit unions and banks is a great way to develop a relationship for borrowing purposes. These local lenders should be great sources of foreclosed and short sale property.
- Get a good price. The old investing adage of "buy low and sell high" holds true for property as well as any other investment. Investors need to be careful to assure that the property is being bought at a good price and be willing to walk away if a good price cannot be reached.
- Live in your investment. Buying a large or well-positioned home at a great price and selling when the market improves is a great investment idea. Investing in a personal residence is tax advantaged as well.
- Consider recreational property. As more and more land is paved over into living space and retail space, the value of recreational property will continue to climb. Look for undeveloped property that is close, but not too close, to major transportation routes.
- Hire a great tax professional. Local, state and federal government can all eat into the profits of investment property. A qualified and knowledgeable tax professional can help to maximize profits on property investments.
- Hire a great real estate attorney. Landlord and tenant laws vary greatly depending on jurisdiction. Having an attorney that is ready and willing to help can save an investor a lot of money.
- Look for property that is not for sale. There are plenty of properties that can be purchased that are not currently listed for sale. Use your network to find people and businesses that are in trouble and you might strike a great deal quickly.
- Plan to deal with problems. While stocks may lose value, property can actually lose money beyond the purchase price. An emergency fund or a line of credit to deal with maintenance problems and issues that arise is a must.
- Have a plan for the property. Before investing in property an investor needs to determine what he or she wants to do with the property. If property is to be rented out, does the investor want to be a landlord or will the investor hire a management company to do the work? Property that is being rehabbed and sold or vacant land that is going to be built upon will need a plan in place upon purchase as well.
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