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Home Buying: Things to do from Start to Finish
[Chap. 8.2]
transport? Is it in a good area? Near water or have a great view? 2. Numbers. Run the numbers. Get every last expense figured into your calculation and be sure that you will have positive cash flow from the start. 3. High home prices. Look in areas with high home prices, as this creates rental demand. What do people do when they can’t afford to buy, or are here only for a short contract? They rent usually in posh areas. High home prices have sufficient 'button' room to reduce rents while still offering reasonable returns when the rental market is depressed. 4. Low maintenance buildings. Avoid old homes that are in need for repairs. Low maintenance means fewer headaches and more profits. 5. Ask to see the rental history. There should also be maintenance history. Note how long the tenants are staying on average, and how well they pay on time. 6. Owner/Manager out of the country. These properties are often the best deals, because it is thought to be managed as a property from a distance. Such sellers are often happy with a quick sale than hold out for a better deal while the property remains unoccupied and deteriorating. If structured properly with a bit of planning and imagination, one may still be able to slip in good returns on their investment in rental properties.
Real estate: location is the key
What drives real estate prices is location. If you are buying property for the purposes of making your home alone, there are personal factors that should determine your purchase decision. But if you are buying property as an investment you have to consider returns from the investment realistically. Are you buying the place and intend to give it out on rent every month? Then a marketable prime property might make sense. But if you