Without honing down on what you want and setting a business plan and long-term goals, you will be directionless and overwhelmed. Without really understanding what makes a real estate investment property reap positive cash flow returns in prime locations, making money in real estate investing will not happen. Simply stated, to become a real estate expert requires time to learn and acquire the right education to succeed and make money in this competitive industry. Everyone is vying after positive cash flow properties in thriving housing markets, and it all depends on an investor’s ability to distinguish and recognize the good investments from the not-so-good ones before anyone else.
Related: Buying an Investment Property Is Easy. Just Follow These Steps
How to Buy Rental Property If You Are Just Starting Out
If you are a first-time home buyer, the best advice we can give is to find a professional real estate agent to set you on the right path and offer his/her expertise to find you the best real estate investment that is aligned with your financial goals and business plan. A real estate agent can cut your time in half and help you find the best real estate investment properties in a much shorter time period. Not only that, a real estate agent can advise you on where to invest, the best time to buy real estate, and for how much. Agents are the best negotiators and can get you the best price on a house due to their experience in and knowledge of the industry.
The Risks of Investing Without a Real Estate Agent
1. A real estate agent is skilled in negotiating an offer on a house and due to his/her expertise, he/she can get you the best competitive price hands down. Without an agent, you have no chance but do you own negotiations.
2. The best real estate investment property is located in prime locations. Without a real estate agent, you will have to do your own research on the neighborhood to insure it is a good place for long-term investing. Agents specialize in certain areas and know the neighborhood inside out, which is important before you close any deals on a house. In real estate investing, you must learn about the neighborhood and location before honing down on a rental property.
3. Without a real estate agent, you will be stuck with doing and filing your own paperwork and contractual agreement. There are negative repercussions if you sign without understanding the terms and conditions of the agreement.
4. A real estate agent can help you determine the type of inspections and potential cost you will incur on repair. It is crucial to estimate the cost of repair and renovation on a rental property before you close the deal on a house. If repair costs are too high, they will eat into your potential profits in the long run.
Related: How Is Cap Rate Used for Evaluating a Real Estate Investment?
How to Buy the Best Real Estate Investment Property Without an Agent
Hiring a real estate professional is not a prerequisite to find the best real estate investment property; you can most certainly choose to do it on your own terms without any side help. As previously mentioned, acquire the right knowledge to grasp important real estate principles before you go ahead and buy rental property. Keep up with market conditions and their effect on the housing market as a whole. If a real estate agent is out of the question, find a real estate mentor who can guide you and give you tips and tricks. Also, do not discount the internet, it has tons of free information on real estate investing, including Mashvisor blog, which gives you deep insight and insider info on everything real estate.
Tips to Buy the Best Real Estate Investment Property
1. Search, Analyze, Compare
Start searching online for real estate properties. There are many websites, and Mashvisor is one of them which allows you to find the best positive cash flow properties in an instant. Real estate investors especially love Mashvisor’s investment property calculator. You also gain access to real estate comps and real estate analytics as a surefire way to find the best real estate investment property.
2. Find an Attorney
Hire a real estate attorney. Expect to pay up to $500 for an attorney to review the contractual agreement and offer advice.
3. View Homes
It is mandatory to view homes in person. Attend an open house, or call to ask for a tour. Be clear with the listing agent that you are buying without a real estate agent. Do not sign anything without having it reviewed by your attorney.
4. Get Pre-approved on a Loan
Make sure your credit score is in check to get approved for a loan. Financing real estate via a mortgage is a good option, and you will build home equity and improve your credit score down the line to buy more real estate properties and build your wealth in turn. Getting pre-approved for a loan reassures the property seller that you are serious about buying.
5. Make and Negotiate an Offer
To buy the best real estate investment property, you must make and negotiate an offer. Build contingencies into your offer; you need a way to protect your earnest deposit in case the deal falls through.
6. Inspections and Appraisals
Mitigate the risk of incurring unexpected costs and expenses by hiring a professional home inspector. Inspections and appraisals are crucial to ensure there won’t be any surprises in terms of repair and renovation down the line. Don’t hire a home inspector from a list, ask around for a recommendation.
7. Close the Deal
Closing the deal entails major paperwork and this is where your real estate attorney comes to play. He/she will review all the contract terms and conditions before you sign and close the deal. It is always best you hire a professional to read through the contract and the legal terms before you sign any paper and claim the house.
Related: How Mashvisor Revolutionized Cap Rate and Investment Property Analysis
Conclusion
The best real estate investment property is found in the best location and sold at the best price. To reap positive cash flow returns on your rental property, make sure to invest in prime locations and good neighborhoods. Without capitalizing on location, you cannot guarantee high tenant occupancy and rental demand throughout the year. Mitigate the risk of vacancy by choosing a good location for your rental property.
Head over to Mashvisor to start your (next) real estate venture!