4 Tips For Buying Your First Investment Property
There is a reason that real estate is often considered a solid investment-- in most cases, real estate continues to appreciate year after year, becoming more valuable with time. If you're looking for a long-term strategy for growing your net worth, investing in real estate can be the perfect solution. But if you're new to investing in real estate, you need to take your time and be prepared. Use the following tips to help you purchase your first real estate investment:
Understand the Market
One of the keys to investing in residential real estate is buying at the right time. Ideally, you should make your purchase when it is a buyers' market and the prices are at their lowest. Doing this will help ensure that you will have a cushion of equity. The last thing you want to do is buy a real estate investment property during a hot sellers' market when there are bidding wars on a house since you can end up being upside down if you end up overpaying for a home.
Work with an Experienced Real Estate Agent
As a new real estate investor, having an experienced real estate agent is very important. It is in your best interest to search for a real estate agent who specializes in residential investment and rental properties. Your real estate agent can help you identify properties that are a great buy and steer you away from those that are not a good investment.
It can be very tempting to purchase a fixer upper since their prices are often low. But it is usually not a good idea to do so when purchasing your first investment property. When you're not experienced, you may end up buying a fixer upper that is actually a money pit, and all of the repairs and upgrades that you have to pay for will wipe out any money that you saved. Consider buying a fixer upper after you have purchased a few other investment properties and know what to look for.
Location plays a huge role in real estate and its value. When buying your first investment property, focus on areas that are desirable or up and coming. Doing so will help ensure that the value of your investment property continues to increase year after year. In some cases, you can find great deals in good neighborhoods by considering short sales or finding a very motivated seller who needs to sell due to a relocation or divorce.