One good thing about a down market is it’s a great time for investors to purchase rental properties or “flips” for very low prices. With the foreclosure listings having a constant presence in our market, these properties go for rock bottom prices and if you know how to find the right one to work for you they are the best investments. Here is what to look for if you are looking to purchase for an investment:
- Finding a property that is structurally sound. You might as well know that with most foreclosures you are going to have to do some up fitting but you want to make sure that you are not getting into more than you can handle. Foreclosures are sold in AS IS condition, so the banks will not make any repairs that will show up on a home inspection they are basically for your knowledge so that you know what you are getting into with the repairs you will have to make, also gives you an out if there was some major repairs that were hard to see, if that is the case it is often times not worth it and time to look for another.
- Don’t go crazy on upgrades. Once you have found a good property that is only in need of minor repairs and cosmetic upgrades you can begin your up fit. You want to make sure not to go to crazy with installing expensive materials to make your property stand out to buyers/renters, remember this is an investment not your personal home. That doesn’t mean you can’t do some great things to give the property character just as long as it doesn’t cut into your profit margin.
- Upgrade ideas on a dime. Here are a couple examples, one would be to use granite tiles on kitchen countertops, you can find them at local hardware stores or flooring stores sometimes on closeout at a great price. Granite tile is very easy to lay over existing countertops and are a fraction of the cost of solid granite, they come out looking beautiful. Another idea is to install some moldings, only a couple hundred bucks can really add some classy flare. If you use chair rail try to only stick to living and dining areas and you can paint the walls under the rail an darker color than your base walls to give some contrast.
If you stick to these three tips you can really make an investment work for you. Happy house hunting!