Buying an investment property can unlock an abundance of opportunities. Over the years the property can realize significant appreciation and cash flow through passive income if you choose the right properties.
The question is, how do you find these kinds of properties? Searching for the right one can be time-consuming and stressful, but it doesn’t have to be. Here are some suggestions and places you can start to get into the real estate market.
It’s important to outline your goals when beginning to look for investment properties. What are you trying to achieve? Will it be a short-term rental, long-term rental, fix and flip, or buy and hold? Being able to know exactly what you are working towards will help you find the exact property that fits your needs.
Along with outlining your goals comes the financial aspect of investment properties. How much can you afford to put down for a down payment? If your goal is to have a short-term rental, do you have the money to pay for the mortgage if there are no tenants? What would happen if the market shifts a specific way? If you are renovating the home, what is your budget? These are the kinds of questions you need to ask yourself and are an important part of your due diligence process.
Where Are You Buying?
Before you get too far into searching for investment properties, research the market you are looking to buy in. What does the market look like in that area? Do you think the neighborhood will appreciate? If you are looking to buy in your own city, you probably know the area fairly well. But what if you find great deals elsewhere in the country? The same rules apply; do your research and due diligence. You don’t necessarily have to be physically there to understand the areas or market. Depending on the region there are lots of reports and forecasts for cities and neighborhoods around the U.S.
Where to Search for Investment Properties
Once you have your goals outlined, made a budget, know what kind of property you want to buy, and have done your research, you can begin looking for investment properties. Here are some resources to start your search.
When a homeowner defaults on their mortgage and the property goes into foreclosure, the lender generally sells the property at auction. Legally the lender is not allowed to profit from the sale so the proceeds after the dust is settled, go to the homeowner. Generally, you don’t have access to the property before buying and you may not see any good pictures on the inside.
Real Estate Agents
By working with a trained professional, you can often find what you’re looking for more quickly. These agents can bring personalized options and clarify exactly what you are looking for. Aside from having access to professional listing services, brokers and agents can also have a lot of insights about the specific market you are interested in. You can find agents through local property dealers, online listings, or word of mouth.
Wholesalers work with property owners to find buyers for their homes. They do this by contracting rights to purchase the house making a small profit by selling the house for a higher purchase price to the end buyer. Nationwide wholesalers provide an array of investment properties and can help you find what you are looking for.
Finding the right property can be challenging if you are trying to figure out everything on your own. While there is no shortage of opportunities, each comes with its own risks. There is a cornucopia of books and resources for you to learn every aspect of real estate investing like this article about the 6 best books for Real Estate Investing in 2023.
And if you are in the midst of your search for a property, check out our exclusive inventory full of single-family homes, multi-family homes, and land.