If you’re looking to invest in a property then the first consideration should be the types of property that are best to invest in, and once you’ve established that, you’ll want to be getting out there looking for your ideal property. There are many ways to look around for property you may want to invest in. It could be foreclosures, short sales or maybe you know someone that’s just inherited property. When it comes to those inheriting property, it could be siblings who may already have their own homes so don’t really have any use for another, and could also use the extra money.
FIND A REAL ESTATE AGENT
The most conventional way to find a property is to use a real estate agent which can provide incredible value in terms of the return on investment, particularly due to the convenience and possibility to have an invested (yet somewhat neutral) third party to mediate between the buyer and seller in order to assess where things such as ‘lowest offer’ really stand. A solid real estate agent is well worth the commission, however, more and more people are starting to buy and sell their homes without using a real estate agent; using property websites that connect private sellers with private buyers, in order to provide a more cost efficient way to
Many amateur property investors choose to head to a property auction, as they’ve heard this will be the best place to grab a deal. There are some great deals to be found at property auctions, however, there’s often a reason the property is being sold at auction rather than by a realtor. This is where it’s important to do plenty of research and investigating into understanding why the house is being sold at auction.
It could be as simple as a financial issue where the bank has foreclosed on the house and their corporate policy is to always sell at auction, or perhaps a relative has inherited the property and wishes to sell it from a distance… either of these motivations are standard, but there is one thing to consider and the best way to picture this is to imagine buying a car at a car auction.
There are a number of genuine cars to be found in a car auction but there are plenty of sellers who will put their car through the auction knowing it has some hidden faults or damage that you might not spot on a quick once over in the auction room. The most important thing, again, is that you undertake full due diligence – view the property, talk to neighbors, have a survey conducted… just like you would with a normal house purchase.
Furthermore, it’s incredibly easy to get caught up in the fast paced negotiation at an auction, where you can spend a lot more than you were initially planning due to the competitive and almost hypnotic spiraling of the price as you battle to “win” your desired property.
A better option, particularly if you are a newbie to property development is to find sellers directly and negotiate with them one-to-one without any middleman taking a cut. This level of negotiation can often be trickier than outsourcing the task to a real estate agent, who is more neutral and mindful to the very personal nature of someone selling their home – but presuming you have tactful negotiation skills, finding homeowners wishing to sell their property is made particularly easy with the explosion of the internet.
There’s always the “door to door” approach where you literally knock on doors with ‘for sale’ signs, build rapport with the property owners and discuss things in a friendly way – but a more efficient use of your time could be to develop a shortlist of online properties to further investigate.