Many business owners try their hand at various business deals before stepping into their sweet spot. Real estate investing is the avenue that many people have used to make their mark in the business world. Ready to dive into the real estate market by investing in a rental property? The opportunities are ripe, but I certainly don’t want you to make any mistakes so follow these tips and you'll be on your way to securing a successful deal.
First, the only numbers you should trust are yours. Use REIAComps to do your due diligence which should involve determining the best purchase price and After Repair Value (ARV), along with potential expenses, maintenance fees, and any other costs associated with a given property. Double check any information provided by the broker or seller. One of the easier avenues to check is REIAComps. Confirm all of your numbers so you know exactly what kind of expenses to factor into the deal.
Be certain to factor in the right property tax amount. Your taxes are based on the sales price. Check with the county assessor for accurate numbers. Once the property transfers to you, your taxes will always readjust if you are paying more than the county's tax assessment of your property. It will not go down unless you appeal, but going up happens automatically.
Keep larger items on the forefront of your mind. Electrical wiring, heating systems and roofing can be your biggest offenders. Know what the prices are that you may incur to make these repairs. Having them inspected by HVAC and roofing specialists is always a wise decision. A property that may have issues is in fact a beginning point for negotiating. Remember that you make your profit when you buy. And if this will be a rental property you will want to make sure all repairs are made prior to moving a tenant into the listing.
Always keep your reserves at the ready. It is important to have funds in place should unexpected expenses arise, because they will. Using REIAComps as a tool to do financial analysis will be beneficial for your long term goals. Always use REIA Comps to assist you when working on making your next deal a success. Don’t for one moment let someone tell you the value of a deal. Let REIA Comps help you decide for yourself.