Some People Still Don't Know It's a Buyer's Market!

By
Real Estate Agent with Associate Broker at Berkshire Hathaway Home Services Georgia Properties 256152

            It has become a cliche' at this point. "Now is the time to buy!" Turn on any financial news program and at some point you’ll hear the experts extolling the virtues of diversification. Real estate, even through the market downturn, has long been considered a conservative, long-term strategy to growing wealth.

In fact, that very downturn has created a historic buying opportunity for potential homebuyers and investors alike. The combination of lower home prices across American and historically low mortgage rates, two essential factors that usually don’t trend in the same direction, have triggered a buyer’s market in many areas of the country. For real estate investors who want to rent their properties, this can make the difference in achieving positive cash flow sooner or right off the bat.

While some seasoned real estate investors make it look easy, to be successful, beginners should follow some basic principles.

·         Learn all you can. You can take a course online at my website www.RonBarnesRealEstate.com at no cost. Before committing your cash, you should have a fundamental understanding of real estate. For example, be aware that, in general, investment properties are not liquid investments. Barring exceptional circumstances, real estate does not sell at a moment’s notice. It could take days or months to sell a property, depending on the strength of the market in a particular region.

·         Consider cash flow. You’ll need to have enough capital on hand to cover any short-term losses due to vacancies between tenants.

·         Start small. Look into buying a condominium, single-family home or a duplex. Leave large apartment buildings and commercial properties to the pros.

·         Inquire at the local Chamber of Commerce about companies relocating into or out of the area. Company movement is one indicator of demand for rental and/or office space.

·         Find a property that will be in demand. Look for a moderately priced home with three or four bedrooms, two bathrooms, and a garage that sits on a quiet street.

·         Research the property. The most common way first-time investors lose is by failing to investigate a property thoroughly. Look beyond the front door. Investigate the reputation of the school district, the crime rate, and plans for expanding a nearby highway or developing vacant land. Ask a local real estate professional about the area, its history, and how fast (or slow) properties are moving.

·         Inspect the home you’re considering for signs of water damage, such as stains on the ceiling and crinkling or gathering wallpaper; open and close every door and window; and check all electrical sockets by plugging in an appliance. Get an independent home inspection, roof inspection and termite inspection. Unexpected repair costs can eat away your cash flow. Because even the best inspection can’t always predict problems, try to set aside some of the rental income for unexpected repairs.

·         Spend time driving the streets of the neighborhood noting the condition of other properties. Are lawns maintained? Are roofs in good shape? Are homes kept up?

·         Be ready to make fixes quickly and respond to the renter’s needs. If you’re not prepared to be a hands-on landlord, consider hiring a property management firm.

·         See your tax advisor for related planning and laws that can affect your investment decisions.

Remember, investing in a property is much different than living in one, and while emotion and attachment can be prime motivators when it comes to homes, it is return on investment that counts when investing in real estate.

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Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

Many good points Ron. 

It could help if the consumer engaged an experienced real estate agent/broker early on. 

Consumers can simply not acquire the experience that a real estate agent has in the span of buying 1, 2, 3, etc. properties.

Nov 23, 2011 11:40 PM #1
Rainmaker
3,577,062
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Ron. Right on the money, but I agree with Lenn above. You can learn a lot by using an experienced agent who may have walked this way once or twice. Enjoy the day.

Nov 24, 2011 01:20 AM #2
Rainmaker
458,823
Ron Barnes
Associate Broker at Berkshire Hathaway Home Services Georgia Properties - Jasper, GA
"Most agents claim they're #1 - I THINK YOU'RE #1!

I totally agree with hiring an agent who knows what to do. When I speak of learning about investing, I'm talking about what you need to know to make a decision. The agent can bring investors to water, but they need to be familiar enough to decide if they want to drink that water or keep looking. Investments that may seem good are not always a fit for the particular individual.

Nov 24, 2011 02:25 AM #3
Rainmaker
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Ken Cook
Content, coding, marketing, host. - Marietta, GA
Content Marketer/Creator

Featured this over at http://activerain.com/groups/ngre - thanks Ron!

Nov 27, 2011 12:26 PM #4
Rainmaker
373,842
Donna Yates
BHGRE - Metro Brokers - Blue Ridge, GA
Blue Ridge Mountains

Roy:  Good tips for beginner investors. As a Realtor®, I enjoy working with knowledgeable buyers. When they decide to buy something, I feel like they are well armed to make a good decision - their own research and education complemented with the expertise and skill of an experienced agent.

May 02, 2012 11:48 PM #5
Rainer
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Janice Traub
West End Cages / http://www.WestEndCages.com / (770) 676-1645 - Atlanta, GA
#1 Fabricator of Solid Steel AC Security Cages

Ron, All it takes is one horrible or not so lucrative deal to turn a novice "off" of the idea of investing in real estate.

Great that you offer training and acknowledge that this is another stream of income...not flood of cash, but a stream!

 

Oct 22, 2013 12:39 PM #6
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Ron Barnes

"Most agents claim they're #1 - I THINK YOU'RE #1!
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