Finding a real estate bargain that suits your purposes usually takes some time and investors need to learn the art of patience so that they do not jump in and buy when there is a better buy just a few weeks away. It takes some research, being constantly on the lookout and being very proactive in the real estate market in order to find those real deals. When building your investment property portfolio it is not something that should be rushed into. It can take quite a few months to find the right property.
The rewards, though, are well worth the wait.
Here are some some tips to help you in searching out a bargain, although do keep in mind that not all tips will suit your particular criteria:
- know your target area, walk it, drive it and visit it several times a week so that you know exactly what is going on
- know the prices in your target area
- know the rents in your target area
- keep an eye out for properties that have been on the market for over 3 months
- look for renovation potential
- can a property be subdivided to get two investments from one?
- search through the deceased estates, public trustee and mortgagee sales websites
- ask around in your target area to see if the neighbors know anyone who might be selling sooner rather than later - you might be able to do a private purchase and save commission
Personal Circumstances Can Force Sales
These are sales that can be difficult to negotiate as the emotions run high, but if it is a mortgagee sale for example, then you are dealing with agents or even directly with the bank.
Often times people who have been left a property in an estate do not want to keep owning the property and they are not able to renovate it to make it more saleable (either because they live so far away, or they do not have the funds) so therefore the property can be bought at a very good price. Estate properties have often been let go a little as the owners have got on in years and have not been able to maintain the property as they would have years ago. The renovation potential is often very high with these properties. Sometimes even just a quick, economical face lift can upgrade the property dramatically.
Sometimes it is a long protracted illness that forces a home owner to sell as they can no longer pay their mortgage or they need funds for medical bills. Then too, are the broken relationships which do bring a number of properties to the market each year.
The point is, if you know your target area exceptionally well you are able to make quick and informed decisions. As I said, it may take a while to find the right property, but it is better to wait for the right property rather than just buy the first 'good' property that comes along as these properties often do not have the financial gain that the 'ideal' property has to offer.
Check out the seller before making your offer:
- do they need a quick settlement
- do they need a long settlement
- are they emotionally attached to the property
- do they want to stay on as tenants
These answers can influence how you write your contact and can often put your contract ahead of others if the clauses suit their requirements.
Take the time and to find your real estate bargain to ad to your investment property portfolio and you will not be sorry.