Investors who buy homes have more choices than ever before. From distressed properties to celebrity mansions, the magnitude of available properties can be a goldmine for both novice and seasoned real estate investment specialists. -click for more info
Many investors who buy homes seek out properties offered through foreclosure auctions. Others prefer to invest in bank owned real estate. By taking time to research the area and network with individuals involved in the real estate market, investors can oftentimes buy houses for pennies on the dollar.
Investors are scouting out properties all across the nation. As a private investor, I feel there has never been a better time to invest. History has shown real estate is one of the most resilient investment opportunities. Although the market is currently on a downward trend, there is little doubt it will eventually rebound.
In order to become successful with real estate investments, it is imperative to develop a business plan. Doing so will help you determine what types of properties will best suit your needs.
High-end luxury homes can yield a tidy profit for investors who have the financial resources to purchase expensive real estate.
Low-cost, distressed properties such as foreclosure or bank owned homes can provide profitable opportunities for investors willing to rehab the house. House flipping is not for the faint of heart or those with little available funds. Rehabbing generally requires time, money and construction knowledge.
Wholesaling can be profitable and requires less work than most other types of investment properties. Wholesaling involves buying a home significantly under market value. The investor then resells the house to a buyer or real estate investor “as-is” for 10- to 20-percent more than the purchase price. The only work required is locating a qualified buyer.
Some investors buy homes to be used as rental property. These houses can be used as long-term, short-term or vacation rentals. Homes located in popular vacation destinations can sometimes yield more income than long-term rentals. It is important to keep in mind the costs associated with rental properties.
Long-term rental homes require the ability to make repairs promptly. If tenants default on their contract, investors may have to retain the services of an attorney to evict tenants or collect unpaid rents.
Short-term and vacation investment properties require the ability to locate tenants on a regular basis. Homes must be cleaned after each rental period expires. Typically, furnishings and household items such as cookware, dinnerware, bedding and linens must be provided.
Another niche several investors are becoming involved in is that of short sales. In order to avoid foreclosure, some lenders allow borrowers to sell their home for less than they owe on their loan. Investors can purchase these homes for around 70 to 80 cents on the dollar.
A small percentage of investors who buy homes seek out probate real estate. Probate properties include houses, commercial buildings, apartments, condos or raw land owned by someone who has died.
Probate properties can be found by visiting local courthouses where probate matters are handled. Transactions are usually handled by the designated estate administrator, but occasionally require court approval.
These are but a few reasons real estate investors purchase homes. If you are planning on investing in real estate, take time to understand all that is involved. Investors should understand real estate laws in areas where they plan to purchase homes, become aware of various financing option, and obtain a thorough understanding of their chosen market.