Investing In Real Estate? Key tips
Real estate is a reliable way to grow your wealth. However buying the right property in the right area can make all the difference. When purchasing real estate, there are a few tips that you need to keep in mind.
Before you do anything, you should work on understanding how the real estate market works currently. The only constant is change, and a successful purchase depends on an understanding of the nuances.
Timing is critical
Choosing the right time to buy can make a huge financial difference. For example, if the current market is favoring sellers (good indicators are that prices are going up and very few sellers need to discount) you may want to wait until conditions improve. Indicators of an approaching bubble are another clue that you should stay out – for instance look at the average rentals to the average real estate price, if it is unusually low beware. The Global Property Guide provides some useful rules of thumb in this regard.
Which real estate agency?
The first rule is don’t use the same real estate agency as the person that is selling your property. Since this agent was working with them initially, any deals they make could favor the seller.
Hire your own inspector / engineer to look at the property before you buy, don’t just trust the real estate agent or the seller, or even use the people they recommend. This small investment can avoid a world of pain later on, although obviously you’d only want to do this with houses that have passed an initial screening.
When choosing a real estate companies go on overall reputation and any personal recommendations you can get.
According to Smart Asset these are the leading real estate companies to provide you with a starting point:
- Century 21
- Keller Williams Realty, Inc.
- Coldwell Banker
- Sotheby’s International Realty
- The Corcoran Group
- Better Homes and Gardens Real Estate
Analyze the area before jumping into a purchase. It may seem superficially attractive on the surface, but further investigation may change matters. You should be looking at schools, distance to malls and hospitals, crime rates and natural disaster history.
Perhaps an oddball consideration, but look at the National Sex Offender Registry to see how many predators live in the region. While there will be some in most regions, you may not wish to buy a property that is right next door to one.
Personal versus market preference
When you invest in real estate, you need to focus on the preferences of a prospective future buyer and less on your own preferences. This might be hard to do, but is necessary to avoid ending up with a property that is hard to resell. A classic example of this was detailed in a documentary by ABC. For example, if you purchase a Roccoco home styled as though it belongs in 17th century France, watch out it might not be to everyones liking. Simplicity and minimalism as easier to resell, and to rework if necessary later.