We have always felt that buying and selling real estate is one of those investment opportunities that will be around forever and will remain lucrative for those who know what they are doing. If you are unsure about how to approach this investment opportunity in your area, it is a good idea to take a look at what the experts are doing. Here are a few tips that should go a long way in making sure your investments are fruitful right from the get go. They were key for us!
When you are looking at a rental property, you might want to know about the monthly return you are going to get on the investment. You will want to be sure about what you are getting. The general consensus is that you should only go with a property that is going to at least yield 1% return on the sales price on a monthly basis. This would mean a home that is worth $200,000 should ideally be driving in $2000 worth of rent a month. Of course this needs to be adjusted depending on what the rental market in the area dictates. However, using this formula for your planning will help you make smart choices with your rent and hold game plan.
What does this mean? When you are looking at a new property that you are going to be investing in, you can’t just buy it in a vacuum. This means, you have to look at the area and what the benefits are for someone that might reside here for a long time. Is it worth living in? Are there enough schools nearby? What about shopping centers? These are all questions that have to be looked at before making the investment and going all the way.
It might be the best deal that you have ever come across, but there is always wiggle room. You have to make sure you squeeze as much as you can out of the deal and negotiate. Feel comfortable with this process and that energy will be felt across the table or phone call.
If you are not negotiating, you are potentially paying a lot more than you actually would have had to with a bit of negotiating. Whether you are the seller or the buyer, you have to get the best possible deal. Even if that means, you are sometimes shooting for the moon because that is going to bring a greater return on your investment in the end.
If you are uneasy about negotiating or just feel that you are not good at it, you can always rely on your real estate agent. The reason I say this is because I have direct experience with this. We tried to do our first deal by ourselves and really shot ourselves in the foot. On all of our subsequent deals we have handed the deal making to our capable agents. They have consistently saved us thousands of dollars and sometimes even five-figure savings in the negotiations. Our agents at New Era deserve a lot of credit and I’m sure you can find someone like them in your area to fight for you when the deals get tense! You will be glad you did.
These are some of most important factors that have led to massive gains for us over the years. Pay attention to them during your ventures and we hope you have great success build your net worth.