“The Bigger the Risk, the Bigger the Reward.” In every market there is an opportunity for Real Estate Investment especially with current low mortgage rates and homes offered below market value. Sources of investment properties can extend from: Court ordered foreclosures auction sales; homes repossessed by banks (REOs); short sales and even family-owned homes that has been conveyed to you.
Some investments can make a quick turnaround profit “flip” while others can make them into rental income that gains profits over an extended period of time. Rental rates are up in the market. According to a survey by the National Association of Realtors, typical investors today plan on holding onto their rental property for 10 years until home prices bounce back.
“You have to buy smart, that means doing your research and seizing the right opportunities.” Most times buying costs need to be very low and fix-up costs modest, only about 5% or 10% of purchase prices to maximize the return on investment (ROI).
How to Find a Good Deal that Works for You:
- “Shop and Buy Locally”- It’s ideal to have a 10-15 minute commute to your investment
- Buy in neighborhood that your familiar with (i.e. you have previously lived there or have family and friends that currently live in the area)
- Work with a Realtor that has experienced with rentals and can share knowledge on the quality of tenants in the area
- Do your homework or let a professional do it for you
(*Research from Money Magazine, September 2011)