We discussed in the previous article the popularity of real estate in recent years. This time, we consider how to place your balls if we want to succeed in our real estate investment. And saying success, I mean: how to make sure it's as close to a cash pass as possible.
When we talk about real estate investing, we can talk about many things. We can talk about the purchase of a building for rental, generating financial flows that we hope positive every month.
We can also only refer to the purchase of a building under its market value, to retype and reevaluate to use its capital gain to finance the purchase of the next.
It can also be purely land speculation.
It can also be a mix and match of all that.
When we bought the house last January, it was clear in our head that it was not a flip. We wanted (and still want) to live there for the long term, but we wanted a home with significant potential for value.
Why? Then the area is to money the resultant salary structure with the new worth of the firm.
Even if we made some mistakes in the realization of the project, we are still on the track. Yes, maybe we should have paid less for it (I think we paid $ 10,000 too much), but between the time we made the offer and the time we bought, two commercial projects are open near the house, which has increased its value.
Conditions of success for a successful real estate investment:
1-Know yourself / be well surrounded
1-Know yourself / be well surrounded
Here is no shame in not knowing everything, but you have to recognize it and know how to surround yourself well. I would never buy the triplex without Nico and even less the house and vice versa. I am the one who follows the market, prices, trends, regulations. Call me Ms. Admin (or not, it's atrocious as a name!) Him; it's the planning of the work, the realization, and the maintenance. We are lucky to have an entourage who knows how to give us good advice.
If in doubt, do not hesitate to call a professional.
And for heaven's sake, have it inspected !!
2-Analyze the targeted market
You need to know your area and trends at your fingertips. Which customers will rent/buy the unit you want to buy? What are they looking for? What are the non-negotiable elements? What is their budget?
The neighborhood also has a significant impact. Some communities are more valuable than others, making resale / renting much easier. We can almost change everything in a building, but the area, that, we are taken with. So be sure of the location! Stay on the lookout for home development projects, school construction, commercial projects that would revitalize a neighborhood puppy.
Our triplex was bought in the ghetto, and it's now a growing neighborhood, making rental easier. We are made in.
3-Do does not buy too much
Some renovations, such as redoing electricity, plumbing, changing the furnace, etc., are not paid improvements regarding market value. You will need to consider these aspects in the calculation of the price offered for the building. If you spend too much on departure, it will be difficult to have a positive return on investment.
4-Well, plan his budget renovations, plus contingency.
Bet on the elements that bring the most "wow for the dollar" (free translation of bang for your buck ). In the newly renovated triplex housing, we have relied on a heated ceramic floor, new "high-end" floating floors and new cabinets in the bathroom. From our research, this was what tenants were looking for most as items in a dwelling.
The floors cost $ 5,000 and the cabinets $ 500. The ceramic floor has a lifespan of 20 years, so we will be able to cushion it for a long time, and the offices have seriously refreshed the look of the bathroom. Result? We rented the apartment in 1 visit.
It is also important to consider whether you will be able to finance the renovations. Will you have to pay for it from your pocket? Since it can extremely change a plan!
What are the deadlines? Will you have the cash to keep the project afloat if renovations were to drag on?
All of the questions you should take the time to answer with a drink, with a relaxed head. Not on the corner of the counter by making an offer to buy.
Just saying '
5-Be prepared for moments of stress
Oh. That. Yes.
Need more?
Every project, as well planned as it is, encounters a moment of stress.
The City is slow to approve the project.
The chosen contractor must postpone the site.
The chosen color is obsolete.
The subfloor is rotten and needs to be reformed.
If around people think that real land investing is less taxing than spending ones under "on the standard marketplace" (which by the way, does not unkind much they will be bitterly disappointed. Real estate is not stressed free! Not only will you be confronted with it, but you will be at the heart of decisions.
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