Information, Tips and Advice on Real Estate Investing
When Renovating, Triage Your Repairs
In many cases, investors will purchase a house and make renovations in an attempt to boost its selling price. When renovating, always keep your eye on the bottom line. The cost of performing a repair should always be less than the amount it is expected to raise the selling price of a home. When making this estimate, always leave a comfortable margin of error.
look at The Market First
Before purchasing property, make sure to do plenty of research on the local real estate market. To begin, see what similar properties sold for in the past. Try to get an idea of what the overall trend is in the area: Are sale prices going up or down? Also, if possible, try to get a measurement of the average length of time houses spend on the market before being sold. This will give you a sense of how long it will take you to sell your property.
Know the Price of Holding a Property
If a property is purchased with a mortgage, holding onto the property can be expensive, as the loan must be continually serviced. For this reason, when weighing the investment potential of a property, always estimate the length of time it will take to sell. In many cases, having to hold onto a house for more than a few months will negate any potential profit.
Consider a Non-Traditional Investment Method
In addition to purchasing and selling houses, there are a number of ways of investing in real estate by purchasing financial securities. For example, by purchasing a real estate investment — like a mutual fund for houses — investors can diversify their position and invest in a number of properties. This is also possible by purchasing shares in real estate exchange-traded funds — portfolios of houses sold in the form of stocks.
