Foreclosures and REOs are still pulling novice investors into the market; if you're one of them, there are a few tried and true “rules” that have been around for quite a while. Even if you've been investing in real estate for a while, it never hurts to refresh yourself on some key guidelines which, even in a market that continues to be volatile, can prove helpful.
First and foremost, remember that due diligence is NOT optional. You've got to understand the local market - and that includes not just where prices are headed, but specific market demand for rental real estate in this price segment, and even the local government's plans for the area where you're thinking of buying.
Second, buy with a written plan; have an entry strategy and an exit strategy. You should ask yourself some critical questions, such as how long you're planning to hold onto the property, and how much will it earn you during your period of holding? Have a good idea of your endgame – and write it all down so that you can clearly analyze it without overlooking any details.
Finally, calculate the actual costs of the property in advance - not just the bargain basement price, but how much you'll need to fix it and maintain it - the management costs, rental commissions, vacancy costs, taxes, to name just a few.
The EMA Real Estate Group are your local experts when it comes to investing in real estate. We ensure exceptional service, including both personal consultation (offering vast experience and knowledge on which you can count) and financial advice, particularly about interest and tax benefits for real estate investors.
Emcee Arah - "the REALTOR with Architectural Dimension" – is a Certified Investor Agent Specialist (CIAS). He is uniquely equipped to assist you in navigating today's residential real estate market. Contact us online or by phone at (301) 452-5252. And leave your comments below – we'd like to hear from you.
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