What Kind Of Properties Are investors Looking For?
There are several categories of real estate available for an investor. The easiest for a beginning investor to understand and participate in is the single-family home.
Why?
1. Homeownership in America is approaching 70%.
2. They are the highest demand type of property.
3. They sell quicker than other kinds of property.
4. Prospective purchasers have the widest range of financing programs available to them, making the property easier to purchase.
If the property does not sell in a reasonable amount of time, it can be rented.
Ugly Properties:
why should you buy the ugly duckling?
The best property to buy is an ugly one. Look for the property that has never been "updated" or improved or one that has been improved, in a very tacky way. Don't be deterred by the pet urine, feces, or mice droppings. Where some see damage and odor, you should see dollars and opportunity.
Ugly ducklings are the properties that have the least competition, houses that can be fixed up by remodeling, not by rebuilding.
Many people are scared about things like leaking roofs and broken windows. Be happy to see those things. They'll discourage most inexperienced investors from purchasing the property. In many areas, you will be competing for some deals with "do-it-yourself" homeowners.
They may outbid you simply because they figure they can buy a home for $50, 000.00 that will be worth $70,000.00 when they're done fixing it up. It never occurs to them that they will spend $10,000.00 for materials and professional labor, one to two years working on it, and live in a construction zone the whole time. The oddest thing about it is that most people will sell the home when they're done, thinking they did great (although they really broke even) and start the process again
Buy, flip and sell works best in a 90-120 day time frame, with professional contractors quickly completing decorating, repairs, and renovations. There some States and areas you may want to plan on buy fix and hold as a rental or lease option. Michigan would be a good example of this. This is due to loss of industry and declining value of property.
Style
Obviously, what sells better often depends on the area. Styles of architecture are different in different areas. However, there are certain things that always seem to increase the desirability of a home to a prospective purchaser.
Among the most desirable things to look for in the style of a home. Brick seems to pull the most interest from buyers. If you have any experience in buying property, you probably already know that brick homes generally sell for as much as 20% more than their frame (wood, aluminum, or vinyl siding) counterparts.
Historical features on older homes are things that should be taken care of and repaired to original condition whenever possible. This includes unpainted woodwork, wood floors, wood doors, fireplace mantels, leaded glass, etc. When working with an older home, keeping the character intact will always help you on resale. Keep this in mind when remodeling; drop ceilings NEVER go in Victorian houses.
The most important factor to look for is size. One and two bedroom homes are difficult to sell. Never purchase any home with less than three bedrooms, with one exception. A two bedroom home with high square footage, may be a candidate for the addition of a third bedroom.
A new investor should avoid houses that need major renovations, have undesirable features that can't be fixed cosmetically, or have an architectural style that does not fit into the neighborhood.
Floor plans are very important. Bedrooms that you enter off the kitchen or living room, or no hallways, will hurt you on resale. Renovations are expensive. Don't go into a project with the intention of moving walls or doing structural changes.
Area
As a new investor, focus on a geographic area within 30 miles of your house. Learn the values of property in your area and build relationships with contractors, inspectors and ordinance officers. Focusing on the same area will also improve your knowledge of real estate values and make your purchase decisions more prudent.
Article by Ralph Mark Maupin for Mr. Lease Option Blog
There are several categories of real estate available for an investor. The easiest for a beginning investor to understand and participate in is the single-family home.
Why?
1. Homeownership in America is approaching 70%.
2. They are the highest demand type of property.
3. They sell quicker than other kinds of property.
4. Prospective purchasers have the widest range of financing programs available to them, making the property easier to purchase.
If the property does not sell in a reasonable amount of time, it can be rented.
Ugly Properties:
why should you buy the ugly duckling?
The best property to buy is an ugly one. Look for the property that has never been "updated" or improved or one that has been improved, in a very tacky way. Don't be deterred by the pet urine, feces, or mice droppings. Where some see damage and odor, you should see dollars and opportunity.
Ugly ducklings are the properties that have the least competition, houses that can be fixed up by remodeling, not by rebuilding.
Many people are scared about things like leaking roofs and broken windows. Be happy to see those things. They'll discourage most inexperienced investors from purchasing the property. In many areas, you will be competing for some deals with "do-it-yourself" homeowners.
They may outbid you simply because they figure they can buy a home for $50, 000.00 that will be worth $70,000.00 when they're done fixing it up. It never occurs to them that they will spend $10,000.00 for materials and professional labor, one to two years working on it, and live in a construction zone the whole time. The oddest thing about it is that most people will sell the home when they're done, thinking they did great (although they really broke even) and start the process again
Buy, flip and sell works best in a 90-120 day time frame, with professional contractors quickly completing decorating, repairs, and renovations. There some States and areas you may want to plan on buy fix and hold as a rental or lease option. Michigan would be a good example of this. This is due to loss of industry and declining value of property.
Style
Obviously, what sells better often depends on the area. Styles of architecture are different in different areas. However, there are certain things that always seem to increase the desirability of a home to a prospective purchaser.
Among the most desirable things to look for in the style of a home. Brick seems to pull the most interest from buyers. If you have any experience in buying property, you probably already know that brick homes generally sell for as much as 20% more than their frame (wood, aluminum, or vinyl siding) counterparts.
Historical features on older homes are things that should be taken care of and repaired to original condition whenever possible. This includes unpainted woodwork, wood floors, wood doors, fireplace mantels, leaded glass, etc. When working with an older home, keeping the character intact will always help you on resale. Keep this in mind when remodeling; drop ceilings NEVER go in Victorian houses.
The most important factor to look for is size. One and two bedroom homes are difficult to sell. Never purchase any home with less than three bedrooms, with one exception. A two bedroom home with high square footage, may be a candidate for the addition of a third bedroom.
A new investor should avoid houses that need major renovations, have undesirable features that can't be fixed cosmetically, or have an architectural style that does not fit into the neighborhood.
Floor plans are very important. Bedrooms that you enter off the kitchen or living room, or no hallways, will hurt you on resale. Renovations are expensive. Don't go into a project with the intention of moving walls or doing structural changes.
Area
As a new investor, focus on a geographic area within 30 miles of your house. Learn the values of property in your area and build relationships with contractors, inspectors and ordinance officers. Focusing on the same area will also improve your knowledge of real estate values and make your purchase decisions more prudent.
Article by Ralph Mark Maupin for Mr. Lease Option Blog
posted by Ralph Marcus (Mark) Maupin | 5:05 PM
0 Comments:
Post a Comment
<< Home