What do you want when you buy rental properties? A safe, profitable investment. Here are some things to look for to make that happen.
Buying rental properties can be a great way to build your wealth. However, as in most real estate investment, it is sometimes difficult to know if you've found a good deal - especially the first time. Here are some things to look for to be sure that rental is a great investment.

1. Location. If traffic is heavier, rentals are easier to rent. A sign will often pull more response than an ad in the paper. If it is a nice locale, it will usually rent faster. This is also true of places close to amenities.

2. Numbers. Run the numbers. Get every last expense figured into your calculations, and be sure that you will have positive cash flow from the start. 

3. High home prices. Look in towns with high home prices, as this creates rental demand. What do people do when they can't afford to buy? They rent.

4. Low maintenance buildings. 

Avoid cedar-shake roofs, and wood-sided buildings. Look beyond current expenses to how much maintenance the building will need. Low maintenance means less headaches and more profits.

5. Good rental history. Ask to see the rental history. Note how long residents are staying on average, and how well they pay on time.

6. Below market rents. Buying rental properties with below-market rents means you get to raise rents. Raising rents means you imediately raise the value, because rental property values are based on income.

7. Complies with zoning and fire codes. Have it inspected, and ask local officials if there are any problems. 

8. Less than 20 years old. This is somewhat arbitrary, but if you limit your search to newer buildings, you will be less likely to have building code and maintenance problems.

9.Owner/manager that is out of state. These properties are often the best deals, because it is tough to manage a property from far away. An out of state seller is often more concerned with a quick sale than a high price.

10. Neighborhood is stable or improving. Stable is okay, but if you can buy in a neighborhood that is improving, you'll rent the units more easily, and therefore get automatic appreciation in value with time.

 

 If you’re looking to buy a fixer upper for your next home or as an investment it pays to take caution. What may look like an easy profit may turn into a huge money pit.

 
Here are some considerations when making your home buying decision.

When buying a fixer upper, experts recommend looking for homes that need cosmetic improvements rather than structural changes or major renovations. Cosmetic improvements can be made with a little elbow grease and a planned budget. Renovations and structural changes have a tendency to grow much larger than anyone anticipates. Costing extra time and money to get the job done.

 Additionally, while structural improvements may be required to make a home livable, cosmetic changes generally have a better return on investment. 

When you are considering a home purchase add up the costs to renovate the property based on a thorough assessment of the condition of the house. You will likely want to have the assistance of a home inspector and a real estate agent who has knowledge of the area. The real estate agent can advise you about what other homes in the neighborhood go for, what the schools and property values are like and if the neighborhood is on an upswing.

 
Be very thorough and estimate on the high end. Include labor and materials. Knowing the home’s estimated market value once the renovations are complete will then help you know what your potential profit will be.
Experts then recommend deducting another 5 to 10 percent for extras and unforeseen problems. They always happen if you don’t make room for them. Once you do the math, you’ll be able to determine what a fair offer is. 

Essentially, it’ll be the home’s estimated future worth less the expenses to fix it up.
Getting experts to help you with your labor, materials and estimated value after the renovations are complete will help you make an accurate and fair offer on the home.

 And always have the home inspected thoroughly so you don’t end up having to make major structural improvements that can eat away at any potential wiggle room or profits. 

Buying a fixer upper is a great way to save money on a home purchase and the rewards can be significant. Buy wisely, buy cautiously and use the advice of experts to guide you and your decision.   

Here are the Pros and Cons of Owning Rental Property.

If you’ve ever thought about owning a rental property and becoming a landlord you likely have a few questions. What’s in store for you? How easy is it to be a landlord? What problems are you going to face? Is it really a profitable business model? 

Let’s take a look at some of the pros and cons of owning rental property to answer your questions.

Advantages of Being A Landlord

You own property – an asset that can be sold, borrowed on and essentially increases your net worth.

Income – Rental properties generally offer an income. Depending on the property and its location, the income will vary. And it’s essentially passive income. You may be required to maintain the home, however, the monthly rental payments generally cover that labor and more. 

Homes tend to increase in value. This means that as you own the property it will appreciate or become more valuable. It’s not guaranteed, however. As the property increases, you can increase rent depending on your goals and your tenants.

There are definite tax advantages to owning rental properties. In fact, your rental income may be tax free if you do not receive net cash flow after expenses are deducted. 

And you can refinance your loan if interest rates fall and your property appreciates. This is tax free. Or if you sell the property and reinvest in another property, the profits can be tax free. IT’s called a tax free exchange.

You also have the satisfaction of working for yourself if you own several properties. This can be your full time job and it generally doesn’t require full time hours. This can be a huge advantage to being a landlord.

Disadvantages Of Being A Landlord

Properties don’t always increase and you may end up breaking even.

There is also the problem of finding tenants or having to deal with problematic tenants. 

Liability problems. Being a landlord means being responsible for what happens in the home. If someone gets hurt, they may decide to sue you. Insurance can be costly and liability can be stressful. It’s your responsibility to make sure your rental home is up to code and safe for living.

Unexpected expenses and repairs. Homes need repairs, it’s a fact of life and home ownership. And generally those repairs cost more than we expect and happen at the worst times. Being prepared for unexpected expenses and repairs with a savings account can mitigate this disadvantage.

Owning a rental property is full of ups and downs. Deciding if it is the right choice for you requires weighing the pros and cons. Consider talking with other landlords and rental property owners before making a decision. To your success!

 Property auctions are a fantastic way to get a great bargain on a home or a rental property. However, they can also be tremendously overwhelming. There’s a lot of information, a lot of excitement, and a fair amount of pressure to get the winning bid. All of this commotion and chaos can send logic right out the door.It’s important to reign in your emotions, as fun as the roller coaster may be, and make buying and bidding decisions based on the numbers and logic. Here’s how to keep things in check at your next property auction.
1- Before you ever consider attending a property auction, know your goals and what you’re looking for. 

Are you looking for a property to rent? A property to fix up and resell? Are you looking for a property to live in? How long will you own the property?  And perhaps most importantly, how much do you have to spend? If you’re looking to buy a rental property, how much do you want to make on the investment? 

2- Know how much you can spend, write it down on a piece of paper and take the number with you. 

You may want to write down two or three numbers. How much you’d ideally want to spend and how much you can spend and still meet your financial and investment goals. Knowing these numbers will help you bid accordingly. Take the paper with you and pull it out before you’re getting ready to bid as a reminder.

3- Research the properties before you attend an auction. 

Make a note of the properties that fit your goals. Research them to find out how they fit into your financial and investment goals. Come up with a top limit of what you’d be willing to spend on each property and commit to sticking to your budget.
Make sure you research the property values around the homes, the neighborhood features, the schools, the taxes and also the condition of the home.
4- Make sure all your funding arrangements are made before you attend the auction. 

This will help you bid with confidence.

Be prepared to walk away. 

No deal is better than a bad deal or an investment you really cannot afford or doesn’t meet your needs. 

An auction is an exciting process, however, it’s important to look at it like a tool not a competition. If you view it as a tool to get what you want, then you’ll walk into the auction confident and prepared.

 

Finding the signs outside of the door that say 'for sale' aren't enough when you are looking at properties for any type of investment.  Real estate is a profession that works off of the economy and how the flow of cash is moving through the economy. If you want to make sure that you are getting the right deal, you will also want to make sure that you are moving into the right market.  

The first thing you will want to do when looking at the market is to see what trends are taking place at the time.  Typically, there will be two markets to look into.  One is a buyer's market, where the prices of real estate will be lower.  The second is a seller's market, where it will be better to sell your home.  These will be dependent on the economy at the time and the conditions that are linked to the different neighborhoods.  

Another sign to look for with any type of real estate is the environment that you will be in.  Communities will usually be linked with specific types of people and demographics.  For example, one area may have more families than older people, while other areas will have retired people or farmers.  While there may be some diversity, it is typical that specific types of people will be linked to the real estate prices and markets.  If you know the demographics of an area, you will also be able to tell when the best time to move is and can make observations about the rates of the homes.  

If you are able to link the different marketing trends to your real estate, then it simply becomes a matter of time before you find exactly what you want.  By observing and researching, you can be certain to find exactly what you need for your real estate investment.   

Generally, when we hear about home foreclosures our heart strings are pulled a bit. Someone just lost their home. It’s an unfortunate situation. However, foreclosed homes also present opportunities for real estate investors and home buyers. 

A foreclosed home provides home buyers with the ability to buy a lot of home for their money. And often times, while we think about the person who had a home foreclosed on them as being an unfortunate situation, some people make the decision to walk away from a home and to let the bank foreclose. 

The benefit of buying a foreclosed home is that the banks are strongly motivated to sell the home. This means you can purchase a foreclosed home at a rate that’s generally much lower than market level. 

Now buying a foreclosure home does pose some unique challenges. Negotiating with banks can be an interesting process. Additionally, you can buy homes at trustee’s sales, and negotiate directly with a family before they go into foreclosure. 

Many of these situations require expert consultation with mortgage lenders, foreclosure real estate experts and attorneys. Don’t let this deter you. The end result could be a savings of thousands of dollars and the ability to buy a home that would normally be out of your price range.

The other challenge to buying foreclosure homes is finding them. It’s not like there are signs in the front yard that say “Cheap Home – Foreclosure – Buy Me.” If only they did! Real estate agents can help you and mortgage lenders can too. In fact many professionals in the real estate field keep close tabs on foreclosure homes so they can take advantage of them themselves. 

There are also services you can join that will help keep you up to date on foreclosures and you can check local records to find them too.

Foreclosure homes offer a unique opportunity to buy a nice home for much less than it’s worth. You can also buy foreclosed homes and rent them out. Becoming a property manager definitely has its benefits.

Before looking for a foreclosure home to buy, make sure you have support. Legal support, knowledgeable real estate agents and good reliable mortgage brokers are the best way to find the right deals.

Check out the Foreclosure.com foreclosure search engine. Located on this page.