Looking for an investment property; Where to begin.
Most investers come in two classes, novices or experts. The novices tend to rely on information they gather on the web or their realtor. The experts know what to look for. They can and often times use an agent, but tend to tell their agent what they want before they go gathering information. Novices are pretty much the one party that got hammered during the housing meltdown. Why? Again, because they relied way too much on outside information rather than doing their own homework.
My experience has taught me one thing; Listen to others, but think for yourself. One of the more popular brands of real estate investing going on in South Florida right now is Latin realtors hosting real estate investment classes in South American countries where they lure cash laden buyers into the condo market with fanciful stories of how to get rich overnight flipping new construction. This, my friends, does not happen anymore. It's impossible to flip in Miami, for instance, because there is way too much inventory and prices are ridiculous already. I liken buying a condo to purchasing a new car; The value dips immediately and getting rid of it is a monster job. If you're going to do it then live in it and enjoy it. But don't ever call it an investment. It's a money pit. A home is an investment.
This brings me to my last point, where to begin. If you have the money and want to invest it wisely then it's always best to begin with commercial property first. If you can afford something with a building on it that is rentable and showing a profit, that should be your first priority. Of course, you will need a property manager, but they are tax deductable. If your wallet is on the lighter side one should consider commerical vacant land in a good location. Stay away from residential land and let the developers handle that. Here is the beauty of vacant land in a nutshell. First, there is no risk because it will always be in demand if in a good location. Second, it costs almost nothing other than a fraction of the property taxes to hold on to. Third, you can always lease the land or just let it mature. And finally, you can always do a build to suit where you sign a lease with a new tenant based on the fact that you are going to build them what they want on your land. In return, they will pay you a higher amount of rent for a longer term, triple net, or all expenses paid by tenant. Where do you get the money to conduct this build to suit you ask? You borrow on the land and the lease. Banks look favorably on loans that come with a built in lease. Are you convinced now?