Making money in real estate is all about buying low and selling high and renting in between. This is why saving money when buying an income property is so important.
Think outside the box when you are learning how to find an investment property for a low price. Use the following real estate tips provided by Mashvisor to help you find an income property for less.
Set a Budget and Don’t Look Above
The very first rule to buying an income property is to create a budget. Set a budget that you know you can afford. Make sure to do proper calculations to create your budget before you start looking. Once you have your budget ready, make sure that you stick to it!
Look at a Lot of Options
If you are buying an investment property and are worried about saving money, take the time to find a lot of potential properties. Having a wide array of options means you are more likely to find a good deal. Look thoroughly and put in the work to find the cheapest property for the best value.
Another great way for saving money when buying an investment property is to make a lot of offers. Low ball the offers and make as many as you can on real estate properties you are interested in. You never know, one or more of those offers may land.
Calculate Upgrade Costs
If you find a cheap property that is a fixer upper but has potential to make good ROI, then consider repairs. What you’ll need to do in this case is have a contractor, or several, estimate the cost of repairs on the property. Next, use a rental property calculator to calculate the potential ROI the investment property can give you. If the ROI outweighs the cost of repairs, then you’ve got a good deal. Beware, however, and make sure you don’t go about buying an income property of this sort without proper research.
Related: How to Calculate ROI on Rental Property – The Ultimate Guide
Look in Other Cities
When you are looking at buying an income property, remember that you don’t have to move to where the rental property is. This seems like a straightforward idea, but it is one some real estate investors seem to miss. When you are investing in real estate, you are not tied down to one area. If you live in California and want to invest in real estate but on a budget, buy a property in Texas. Properties in other states might be much cheaper and have a good ROI because they can be rented out right away.
Make sure you use a heatmap analysis tool, as well as an investment property calculator to find out all the metrics you need about any location in the US.
Sale by Owner Investment Properties
Buying an income property from the owner is a great way to save money. Owners usually have no idea how much their property is actually worth. You may find the property advertised online on websites such as Craigslist. If not advertised online, you will have to go out and look for them.
Foreclosed Investment Properties
Foreclosed properties are the most infamous for being cheap real estate investing options. However, you need to make sure you do your research before you get caught up in the process. Just because a property is foreclosed, does not mean it is a good deal.
Related: Property Finder Tool – Finding Real Estate Investment Properties in 2018
Work on Your Negotiation Skills
You don’t always have to find cheap real estate properties to get a good deal. Instead, you can work on your negotiation skills. Yes, this won’t work all the time, but believe it or not, strong negotiation skills can save you lots of money when buying an income property. You will be able to buy low and sell high with the right negotiation skills. Network and meet more experienced real estate investors and ask them for the best negotiation tips they use.
Vacant homes are a great option when you are buying an income property on a tight budget. First, vacant properties are probably not on a high priority list for the owners. They are likely just looking to get rid of the property especially if they moved far away. On top of that, vacant properties still accumulate cost which the owners don’t want to pay for. These are great properties to look at for an investment property buyer.
When you are buying an income property and you find one you like, try to make an offer quickly. This is a little trick experienced investors use to get cheap real estate. Owners are more likely to sell their property to the very first offer they receive even if it is not the price they are looking for. This strategy will get you on your way to making rental income sooner than you thought.
Short sales are a great way to find affordable investment properties. These types of income properties have the potential to bring in a high ROI if researched properly. Essentially, short sale real estate investment properties allow you to buy the home below market value due to the current owner’s inability to pay the loan off. Basically, you will be buying an income property on its way to foreclosure for a price that is below market value. The issue with short sales is that the bank or lender of the loan has to approve the sale before it is finalized. This process could take up to a few months which you should keep in mind when you are buying an income property of this kind.
Related: Short Sale vs. Foreclosure: Why Opt for Short Sales in Real Estate Investing?
Make sure to utilize all the best real estate investing tools when buying an income property. Consult Mashvisor for the best real estate tips and tools for today’s real estate market.
To learn more about how Mashvisor will help you make faster and smarter real estate investment decisions, click here.