The average price investment property is expected to rise again this year, and mortgage rates are due to creep up as well. And that’s on top of the increases already experienced over the past 12 months.
A median-priced, three-bedroom home bought in the fourth quarter of 2014 cost a homeowner 21% more a month, compared with one bought a year before. Monthly costs include mortgage, insurance, taxes and maintenance.
So how can you find that perfect rental property?
1. Stop Waiting and Get Out There.
You must quickly realize you are not the only investor out there looking for deals. Have your escrow money, financing in place, and paperwork ready to go at all times. You never know when that big fish is going to bite.
• Figure out how much money you have to work with for a down payment, repairs and upgrades. Don’t use every penny. Get some in reserves.
• Decide what price range the investment property should be in.
• Stay focused on the area you want to invest in and houses that fit your business model.
Too many people waste time running around looking at properties that do not meet their business model, or outside of their financing guide lines. Stick to the plan.
2. Finding That Perfect Property.
Do not hire the first agent you meet with. Look for the realtor that specializes in working with investors or the area you are interested in. They need to have relevant expertise that align with your goals. For example, if you’re looking for a run-down house to flip, don’t choose someone who focuses mainly in luxury homes.
You can also find great deals that are off market and not part of the MLS system that the realtors use. It’s easier than you think. Ever see those We Buy Houses signs? Call them and have yourself added to their buyers list. You can also do a search for We Buy Houses and the particular city you live in to find a local wholesaler near you.
3. Don’t Over-think. Make the Offer.
If you find a place that meets your guidelines for the area, make the offer. I have seen people time and time again over-think themselves out of great deals. Don’t be afraid to make the next move. Investing in real estate is a little scary at first. But if you stick with the plan and don’t give up, you will not fail.