It’s a great time to invest in real estate. Every investor has personal goals in mind, but in my experience as a Palm Beach County Realtor I’ve learned there are certain things every investor should know.
The actual sale price of comparable properties in the same neighborhood is one of the best indicators of a property’s actual market value. Similarly, area rents dictate how much you can charge tenants. Tenants will move or even purchase their own space if your rents aren’t competitive.
2. Tax Laws Change
Look for an investment that doesn’t depend on current tax laws for profitability. Tax laws change all the time. A sound property with good financing is your best bet.
3. Stick to Familiar Ground
The more you know about your chosen investment niche, the better. For example, if you are a contractor with experience working with banks, start with fixer-uppers or foreclosures.
4. Don’t Buy a Pig in a Poke
Analyze the financial statements. Know the actual costs and returns for this property.
5. Assess Your Market
A landlord’s customers are the tenants. Recent rent increases or poor service on the part of the current owner may have your tenants planning a move. Tenants with short-term leases may be warm bodies lured into place to attract buyers.
6. Know the Tax Situation
Taxes can make or break your investment. A tax advisor can help you turn the tax situation to your advantage.
7. Get an Insurance Quote
Your insurance will be based on the value of the property, which is based on how much you pay for it. The seller’s coverage may be based on a lower estimate, so try to get an idea of how much you will pay.
8. Verify Utility Cost
Contact local utilities to find out the actual average utility usage. This is especially important if any utilities are included in the rent.
9. Call Your Accountant
Make sure your accountant is up to the task of making the most of your legal tax deductions.
10. Get an Inspection
Thoroughly inspect the property. A professional inspector can identify expensive defects in the structure or the mechanics before you buy.