If you’re anything like us, you can’t resist a great deal. Whether it’s a pair of designer flats you found on clearance or a beautiful antique coffee table you scored at a flea market, nothing compares to the rush of paying pennies for a high-value item. In the real estate world, this is a feeling that savvy investors know well. After all, the cheaper you can buy a property, the more attractive the return on investment.
But securing a deal like that is easier said than done – especially if you’re new to investing. The following tips will help you spot a real estate bargain when you’re out on your next property hunt.
Look for the worst house in the best neighborhood
A home in a great neighborhood will usually come with a big price tag, but that doesn’t mean there aren’t deals to be found. Though buying a house that needs some TLC will require a bit of time and money to fix it up, you’ll recoup your investment and then some when you decide to sell.
Check out foreclosures, short sales, and auction properties
Perhaps the most well known way of getting your hands on an affordable property is through a short sale or foreclosure. These deeply discounted homes, however, can come with some pretty expensive problems. Be sure to inspect the house and neighborhood thoroughly so you know what you’re getting into before signing on the dotted line.
Find a good REALTOR® to help you locate opportunities
Many real estate agents have taken courses and have become experts on distressed properties (short sales and foreclosures). Finding a REALTOR® who has experience selling investment homes and who understands return on investment, net operating income, and debt service will be invaluable in your search for a bargain.
Wait until new construction hype has died down
If you’re looking for a home in a highly anticipated community, don’t give in to the new construction hype. Every day that a builder has a home sitting on the market, they’re losing money. Look for homes that have been for sale longer than 45 days to increase your chance of getting a good deal.
As the real estate saying goes, “You don’t make your money when you sell, you make it when you buy.” Keep the above tips in mind when searching for your next real estate investment and you’ll know that killer deal when you find it.