Buying real estate can be a great way to increase your wealth. Whether you want to buy property to sell once it appreciates or you want to buy property to rent it out, you can create a nice portfolio for yourself if you choose the right opportunities. However, identifying those opportunities can be easier said than done.
Here are a few things you can look for to help you identify good investment opportunities:
The primary rule of real estate is “location, location, location.” The value of any home or commercial building is heavily influenced by where it is located. Everything from the quality of the school district to the types of businesses that are in the neighborhood will have an impact on value.
If you are looking for investment opportunities, you should look for neighborhoods that have the potential to appreciate rapidly in the coming years. If the neighborhood is already popular, prices are probably already high and won’t go much higher. What you want to look for are neighborhoods that will be impacted by planned developments, such as a new highway that will make commuting easier or a trendy new shopping mall that will attract workers and visitors. Do as much research as possible to make the best decision.
An easy way to get some built in equity in a property is look for foreclosures. These homes and commercial buildings are being sold by the banks, which are just trying to recoup whatever money they can on the defaulted loan. You will be able to pay thousands less than market value for these properties in most cases.
Of course, everyone else who wants to invest in real estate will be looking at foreclosures, as well. You will have to be persistent in your search and fast on your offer if you want to get the best deals.
If you’re handy with a hammer, you might be able to buy real estate that needs a little help, then fix it up and sell it for a considerable profit. You’ll need to have vision to identify the properties that can command high sales prices once they are renovated. Then you’ll need to be willing to put in the work or have the budget to hire someone else to do it for you. Before you buy, you’ll have to have a very good idea of what work needs to be done and how much it will cost. You can then compare that to the profits you expect to get when you sell.
Investing in real estate can be a great way to grow your wealth, but you have to have some investing savvy to identify the right opportunities. Learning as much as you can about the neighborhoods in your area is a good place to start, and then you may want to consider looking at foreclosures. If you don’t mind the work, buying a property and fixing it up, or “flipping” it, can also be a great way to make a profit.