Is An Income Property Right For You?

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  • Thursday, March 29, 2012
  • Is An Income Property Right For You?



    The appeal of income properties and the potential for what may seem like easy money and early retirement have likely crossed the mind of anyone who has heard of this business venture. There is a lot more to consider before entering the income property game, however, than simply purchasing a property and watching the dollars roll in. Here are a few things to consider before launching into your new career.



    Can You Recognize An Income Property When You See It?



    There are a lot of features that make a good income property. Whether you are considering flipping it for a profit or renting it out to potential tenants, knowing what to look for is more than half the job. Can you realistically estimate what the cost of renovations to the property will be? Do you know what the value of the home will be after the renovations, based on its size, location, etc.? Do you know what the market rent would be for the property? If you can't answer any of these questions you either have a lot of work to do, or you may want to reconsider.



    Not Scared Off?



    So you think you can reasonably identify an income property and are still interested in making your first purchase. Here are a few tips for making that a success!



    Know Your Intent-Whether it's flipping or renting the property, you should have a clear picture before you make the purchase. Have an estimate of what the renovations will cost as well as the profit margin of the investment, both in the short and long term.



    Consider Splitting The Costs-Many people who enter the income property market reduce the risk by having partners. Whether it's a friend, relative, or business partner, this may be the right decision to minimize your risk in your first venture.



    Make It Your Business-Whether you plan on doing this as an additional source of income or you are going into it full time, realizing that this is now a business will prevent you from losing a fortune. You will spend a lot of time getting to know both the real estate and the home renovation industries, and the more you know, the more successful you will be.



    Deciding to get into the income property business can be a time consuming, but ultimately very rewarding, venture. Like any business, the effort you put in and the knowledge you have will determine the success you achieve.

    Getting To Know The Neighborhood Before Buying A Home

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  • Getting To Know The Neighborhood Before Buying A Home



    There is a reason the term “location, location, location” is used so commonly within the real estate industry. The location of a property is one of the most important considerations when selecting a home, as it will affect the value of your home, your day-to-day life, and even your own and your family's safety. So what can you do to find out a little about the area in which you are considering a home purchase, and what in particular should you be looking for?



    Know Your Needs



    The biggest obstacle to finding a home in an area that can meet all of your needs is not knowing clearly what those needs are. While it may be nice to live near the lake, or by your favorite restaurant, what is it that you and your family will need and want in order to have an enjoyable and functional lifestyle? Facilities such as grocery stores, good schools, and community centers may be necessary for families, whereas access to theaters, good restaurants, and a vibrant nightlife may be important to young professionals.



    Get The Info



    When searching for your dream home, knowing where to look before starting out can help make the task easier and faster. So before getting started with the house hunting, do a little neighborhood hunting first. There are a number of resources online, from municipal Web sites to forums, that you can use to find out about prospective areas that may be right for you. Contacting a real estate agent is also another great resource in finding an area that can meet your needs.



    Check It Out For Yourself



    All the research in the world can never replace experience, and if you are planning to purchase a home you will want to be sure the location is right before making what will likely be the biggest investment of your life. Taking a walk in the area, trying out the local facilities, and getting to know some of the locals can really help you to determine whether the area will be a fit for you and your family. You may also want to check out the area at different times of the day, or even the year, if these are considerations that may affect your happiness in your new home.



    A little extra work can really mean not only choosing a home that is right for you, but making sure it is in an area that can meet all of your needs.

    Buying A Home That Can Grow With Your Family

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  • Buying A Home That Can Grow With Your Family



    If you are a first time homeowner, or are purchasing a home after a major life change such as marriage or having children, what should you consider to be sure your new home can grow with your changing family? The time and effort that go into purchasing and decorating a new home, not to mention finding it in the first place, means that you'll want to ensure that your home will be right for you and your family for years to come. So what should you look for in your new home so that it will give you enjoyment and be functional both now and in the future?



    Size



    Though a cute two-bedroom home may be right for a newlywed couple, this type of space will likely soon be outgrown if there are any children in your future or if you and your spouse like to entertain. You will also want to consider the number of bathrooms and the facilities in them. Having only one toilet or shower can certainly put stress on a growing family.



    Features



    Special features of a home, such as a finished basement, central air, and a large yard can make your home a more functional and enjoyable space, especially if you have or are considering starting a family in the near future. You may also want to consider the age of the home you purchase and its features or appliances, as this may lead to future costs that may put stress on your financial situation at a time when one spouse may be at home caring for the children.



    Location



    Location is also an important consideration when choosing a home that can grow with your family. Choosing a safe neighborhood is always an important point when selecting a family home, but you will also want to consider the proximity of good schools, community centers, and shopping. Also, facilities such as parks and libraries can make a neighborhood truly a great place for families. You may also want to consider the demographics of the area in which you are purchasing in order to be sure it is a match with your values.



    As the old adage goes, home is where the heart is, and choosing a family home that is right for your family can really make all the difference in having a happy, fulfilling, and safe family life.

    Buying A Home Long Distance

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  • Buying A Home Long Distance



    The process of purchasing a home can be a complicated and stressful experience, but if you have to purchase a new home in another city the experience can become even more complicated. Whether you are relocating for a job, retiring to a dream location, or are just looking for a change, purchasing a home long distance has a whole separate to-do list on top of the already long list of things that need to be done to purchase a new home. Here are some tips to make purchasing a home long distance a little easier, and still get the home of your dreams!



    The Internet Is A Powerful Tool!



    The internet is a powerful research tool for learning more about virtually any topic, and purchasing a home is no exception. From finding a REALTOR® to searching properties, the internet is a great aid in finding a home. It is also a great resource for finding information about potential lenders, home inspectors, and all the other extras involved in buying a home. Though the internet is a great resource in the real estate market, like any information you find online, it is always important to be sure it is coming from a reputable source. Finding Web sites that are run by professional REALTORS® or real estate organizations is your best bet for reliable information.



    Hire A Local REALTOR®



    Your best approach is to be sure you have an agent in your prospective area on your team early on. They can certainly direct you to some great online resources and help you determine which are accurate and up-to-date. They are also a great resource for finding out which neighborhoods would be a good fit for you and your family, and the local amenities that are available to you.



    In general, buying a home long distance can have its obstacles, but with a little research on your part and the help of a professional REALTOR®, you can make the transition to both a new home and a new city easier and stress free.

    Buying A Foreclosed Property: What You Should Know

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  • Buying A Foreclosed Property: What You Should Know






    Given the recent state of the economy and the rising rate of mortgage foreclosures, the number of properties available at rock bottom prices is at an all time high. While purchasing one of these homes may seem like a sound investment and a great way to get more house for your dollar, there are some issues to consider before purchasing a foreclosed property. Depending on your financial situation, your experience as a homeowner, and your access to information about the foreclosure market in your area, there are some risks involved.






    Finances Of Foreclosure







    The financial considerations of purchasing a foreclosed home can sometimes be overlooked. Often foreclosed homes can be in need of considerable maintenance and repair to make them habitable. You need to know this cost when making the purchase, or you may end up with a considerable amount of debt in bringing your home back to its original shape. Also, even though the price of the property is right, there are other financial considerations you may not have considered. The cost of maintaining a home, property taxes, and utilities are all expenses that may be greater than your budget will allow, especially if you are purchasing a home that is much larger than your existing home or if you are unfamiliar with the costs associated with home ownership. There is also the consideration of your ability to pay for the purchase. Often foreclosed properties must be paid for in cash, so be sure you have the available credit.






    Knowing The Facts







    The process of purchasing a foreclosed home can be much more time consuming and complicated than a normal real estate transaction. If the sale is occurring because an eviction notice has been served or if you are purchasing the property at auction, you may not be able to inspect the house before purchasing it or you may have to deal with some issues to get the current homeowners out. There is also the issue of not knowing the condition in which they have left the home. You will want to be sure you get the advice of both a real estate agent and a banker to ensure that your purchase is both a good investment and will increase in value over time.






    Overall, purchasing a foreclosed home can be a great way to enter the income property market or find yourself a great investment opportunity, but being sure you have all the facts can prevent you from making a poor investment decision.

    Buying A Fixer-Upper: Are You Ready For The Work

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  • Buying A Fixer-Upper: Are You Ready For The Work



    Always dreamed of renovating a home exactly to your specifications, or have you found an older house that is structurally sound but needs a lot of work inside? Perhaps the price is right and you can't resist all that house you can get for your money. Whatever the reason, buying a fixer-upper can be both an exciting and rewarding purchase or a financial and time consuming disaster, depending on whether you are prepared for what you have gotten yourself into. So what should you know before buying a home that requires a little or a lot of tender loving care?



    The Benefits



    The benefits of purchasing a fixer-upper are obvious. The price is usually right, and if the seller wants a quick sale because of decreased interest in the home, you may be able to negotiate a really great price. Also, if you intend to flip the home after the renovations, the profit for the money and time you have invested can be quite considerable. The trick to getting these benefits, however, is knowing what type of property to look for, as well as having an accurate idea of the associated costs, and realistic expectations of the time and labor it will take.



    What Makes A Great Fixer-Upper?



    There are several features that may make for a great fixer-upper.



    Location-Buying a home in a desirable neighborhood is always a smart idea, particularly with homes that require a lot of work. Purchasing a house in a sought after area can mean a greater profit margin for resale value.



    Layout And Configuration-This is especially important if you plan to sell the home after the renovations are finished. Selecting a home that will appeal to the greatest number of buyers will get you the best price. Also, choosing a home with a layout that flows may save you a considerable amount on the actual renovation costs because you are less likely to need custom installations and work.



    Condition-Ultimately the most important consideration is the actual condition of the home. Choosing a fixer-upper with only cosmetic problems such as damaged flooring or old fixtures and appliances, and in need of only a new paint job, can often have the greatest profit margin and require much less money and time.



    Overall, when purchasing a home that needs work, getting a qualified home inspector's advice and getting estimates of the cost of work to be done before making your offer can make all the difference.