The housing market can turn around, and when this happens investors almost always run to property as the next preferred form of investment. Real estate investment has innumerable benefits in comparison to other types of investments. For example, not only will the property investor create equity in the property but will also enjoy a positive cash flow. Also, no state or federal income tax will be levied against the property.
Be that as it may, investing in property in Cary, North Carolina, just like everywhere else, requires doing some homework. This will help you avoid some of the usual mistakes investors make when investing in real estate.
Below Are Tried & Tested Tips for Buying a Cary investment property
Observe the Metrics
Before buying a property for investment, you should first consider its ability to generate wealth. Highly consider metrics such as the vacancy rates, historical increment trends, places of work for local residents, demographics as well as the population growth.
Make a prediction on who is most likely to look for a home in the area. Are they families, retirees or young professionals?
Having done that, now consider making a property purchase based on those results. Also more importantly, be sure to look for red flags in the area such as job cuts.
Conduct a rent survey
In order for your Cary investment property to generate profit, you need to do some calculations and set the limit on how much rent you will need to collect.
Conduct a serious rent survey and see if the property you want to invest in has potential or not. Compare the properties within the area to know how much the properties rent out for.
You also need to look if there's enough demand for the type of rental units you wish to invest in. The best way to determine this is to look at the existing occupancy rates.
Do a property inspection
Take note of any problems you come across. Check if the basement floods after it rains or if it has a stale odor. Also, check if the roof is in good condition or if the house appliances are working as they should.
In addition, you need to check if the plumbing works and electrical systems are up to standard and meet the local building codes.
It is highly advisable to seek the services of a qualified home inspector for this purpose especially if you are not a professional. This will save you a lot of time, money and unnecessary headaches in the long haul.
Assemble a Team
For you to be a successful investor, you need to have a team of experts beside you. You need to look for a competent real estate agent who is well versed in the local market, an honest appraiser as well as attorney who specializes in matters of real estate.
In addition, you also require a trustworthy lender who can provide finance when you need it.
Investing in real estate requires regular repairs, maintenance, and even remodeling. As such, you need people skilled in those professions.
You need a painter, a plumber, an electrician, an HVAC contractor and others on your team. Or better still, you can hire the services of a property manager.
Do Cash Flow Judgments Properly
This is necessary as property investors need to take into account all the costs involved. These costs include those for renovation, repairs, and maintenance.
And just to be safe, you may want to allocate more than the estimates as costs may run over when you're least expecting.
Also, make sure to designate enough time for interviewing property managers in order to be well versed with their service fees.
Come Up With an Exit Plan
Buying an investment property is just one part of the equation. The other part is having an exit strategy in the event that you want to purchase your next property.
In coming up with the exit strategy, you may want to purchase a property in need of restoration after which you'll sell it later on at a higher price. Make sure to factor in the financing options available as well, when thinking of the exit plan.
Consider Your Options
Let's say somethings don't work out as you initially thought. For example, the rental market might be flooded or the bottom might fall out of the Cary property, just as you were hoping to sell it.
In this case, the best options would be to go to the wholesale option or offer a buyer a lease-purchase deal.