Searching for an investment property is a totally different strategy than the real estate search for the average home buyer. Although owning a home is an investment, it also fulfills the basic needs of shelter and appreciates over time. An investment property is meant to create either immediate income through resell or recurring income through a rental agreement. The prospect has to yield a successful financial return in comparison to the purchase price plus expenses for repair and improvement of the property.
For this reason, the best deal may be found in foreclosures, abandonments, probate homes, or properties where owners struggle with maintenance. It is wise to generate a research strategy which incorporates geographical and property requirements along with budgetary expectations to help target the ideal property.
To help facilitate the search effort, the buyer must have an idea of what they want. A list of criteria will not only guide but will also motivate and keep the search on point. This list can include:
- Purpose (resell or rent)
- Location (county, city, neighborhood)
- Area amenities (shopping, schools, parks other conveniences and safety features)
- Residence Type (condo, house, duplex, apartment)
- The condition of the property (some repairs to a major overhaul)
- Property size
- Financing and Expenses (cash purchase to maintenance expense)
- Expected Income (large return from reselling or recurring income from rentals)
The next step is to discover the physical locations for buying opportunities.
To either start or grow your investment achievements is an exciting time in your life. Share your excitement with friends, relatives, and colleagues. Social media is the best source to broadcast your adventure. Write about what you are looking for and ask others to look around their area. Have them send either addresses or photos of possible prospects. You never know what others know until you ask. Your investment property may be the “tweet” of the day.
Tour the City
First, start in your own neighborhood. If you live there, more than likely, the specifications on your list will match. Take a walk around the neighborhood and note “For Sale” signs. Look up the property to see how long it has been listed for sale. There is always a possibility of a deal when a home has been listed for a long time.
Be aware of properties that are in apparent need of maintenance. Perhaps ownership has become a financial burden to the resident. You could be more than someone looking to buy an investment property. Moreover, you could be a great help by offering a quick sale to an owner under hardship.
Drive around areas that complement your criteria and look for potential treasures. Write down addresses so that you can research ownership and property information. Always make sure you consult the legal owner of a property. Do not assume the person living on the property is the legal owner. In Orange County Florida, you can go to the property appraisers website to find ownership and further property information.
Craigslist has been a long time low-cost method of listing homes for sale. Housing opportunities can be located according to location and type. From real estate agents to sell-by-owner, you can find homes for sale through a variety of contacts. Many do not list the building address in the advertisement. It’s best to call to inquire about the location. After you get the address, verify ownership by contacting the local Assessor or Property Tax Records office.
Real Estate Professional
Real estate professionals have access to all types of home listings. One of the most popular sources is the MLS (Multiple Listing Service). The MLS is a database of homes for sale. Although most of the listings are generated to make a substantial profit from the sale, you may still find deals throughout the list. The real estate professional may also be able to help you with listings for:
- out-of-state owners
- probate homes
You can also buy listings from various websites on the internet. If there is a cost, be sure to check reviews on the company to see what customers are saying about their service.
There are several websites to search for investment property. It may take time to go through the catalog of homes for sale but there are deals to be found. Each website offers unique features. Some features include filtered searches, location data, sales comparisons, and foreclosure information. Here are just a few you can check:
Also, try your local newspaper website and online community boards.
Discovering the investment property that is right for you will take time and patience. Don’t stop at the first place you see. The best deal may be around the corner from a good deal. Continue to check around until you are satisfied with your selection.
When you find a list of owners you want to contact, think of sending a short note to express your interest. Although we live in the era of email and virtual communications, a piece of paper in the hand of a stranger makes for a more personable connection. Include the address of the home, as they may have more than one, and your contact number.