One of the most important jobs of a successful property investor is to find a good property investment deal and structure it to make the most money from that deal. It is important to note that a property investor is not a solicitor, a property management expert or even a maintenance guy. These jobs although essential should always be outsourced to the appropriate professionals.
In addition to deal structuring, a property investor needs to be able to conduct a proper valuation of any property to decide whether a deal is worth pursuing or not. Estate agents and surveyors value property every day. By using similar techniques of monitoring sold prices and market conditions, there is no reason why any lay person can’t value properties himself.
A good property investor will always make money regardless of what the market is doing. By making a list of comparable prices of properties which have recently sold in your area and by speaking to estate agents who are very close to the market you will be able to make a better investment decision.
We all know that it is more difficult to find a bargain in a rising market than it is if the market is falling. However, in a rising market the probability of selling the property immediately for a larger profit also increases. Hence, your investment strategy for property investing in a rising market might be to flip property. If the value of properties is generally decreasing then there are more opportunities to bargain and hence obtain some great property deals. These properties should be kept as rental investments. Henceforth, you can make money whether the market is rising or falling.
Any good property investor should consider the following when investing in property:
– limit your risk by doing your homework. Determine key factors such as the average length of time properties have been on the market this month versus last month to help gauge market condition.
– leverage your finances. The less of your own money you invest in property, the more properties you can buy and you will also risk less of your capital should things go wrong.
– assess the tax situation: Taxes are an important part of successful property investing and this can make a difference between positive and negative cash flow. Always know your tax situation and use it to your advantage. Hire a good tax accountant to advise you.
– know your likely expenses before any property purchase. This will allow you to budget for any development work that may be necessary.
– always conduct a thorough inspection of your property before you buy it. Never buy a property without examining it. Consider hiring a builder or surveyor if you are unsure about anything.
– compare property values before purchase. Always compare your property value with a similar property in that area before buying it.
– learn how to negotiate with estate agents and vendors. The less you pay for your property, the greater the profit. Never pay asking price for property.
– always have an exit strategy in place. Why are you buying this property, how much will you spend and what do you want to do with the property once any works have been completed.
The property business like any business will require you to do your homework. Follow these simple tips and your success as a property investor will be greatly heightened.
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