How To Be Safe With Investment Property

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When investing in real estate, it is important to stay safe and avoid potential losses that can put you out of business. Knowing what to look out for is therefore very important for your real estate investing business.

The following tips will guide you to stay safe when buying investment property. To be successful in real estate investing, you must stay out of potential traps that can put you out of business with devastating losses. Knowing what to look out for is therefore very important for your real estate investing business.



Follow these 6 tips to stay safe and profitable as a real estate investor.



1) Buy properties with equity

I think this is the standard rule. Avoid properties you buy at market value.



Expect no price increase in your investment properties in the near future.



The real estate market is full of properties with no buyers. Banks are selling them at deep discounts, sometimes as much as 30%.



If you buy directly from motivated sellers, focus on those properties that have immediate equity even if you use creative means of financing such as lease options.



2) Know your area

Even with equity, you must make sure you buy houses in the right neighborhood.



If you keep them as rental properties, you might not get good tenants in the wrong neighborhood.



Focus on neighborhoods liked by most people. Can you live there? Can you let your kids grow up there?



Is this an area that is growing and shows even better potential in the future?



If the answer is yes, it may be a good place to invest.



3) Is there demand for rental properties?

If you buy houses to hold, you probably need to rent them out. Can you easily rent out properties in that area?



Can you easily rent our your houses if you cannot sell them right away? In case of unforeseen circumstances, this will cushion against possible losses.



4) Think outside the box

Sometimes even with little to no equity, you could still make money if you did lease options, rent to own or owner financing.



If you can acquire properties with equity on terms, you can make a profit right from the beginning.



Real estate laws have been changing recently, so consult an attorney for your real estate transactions.



5) Get in light

In the event of unpredictable circumstances, how much money can you afford to lose? The less you invest, the less you can lose if things go South.



Whether you seek traditional mortgages or buy on terms, try putting as little money as is practical.



6) Consider private money

If you invest in real estate, having a ready source of private money is crucial for your business success. You are not limited as to the type of properties you can buy or how you finance them.



For instance, with a bank loan you cannot acquire a lease option property but can do so with private money.



Get a real estate investor website for seeking private money investors and actively look for them. This website will tell your story for you.



Once you have private money investors, the sky is the limit.


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