How to Turn an Old House into a Profit

Real estate investing has created more millionaires than any other industry.  The good news is that anyone can do it; the bad news is that everyone can do it.  Investing in real estate is simple, but it is never easy.  You need to consider few factors before you jump the gun.  

TIMING

Now is a great time to be investing in real estate.  There are many opportunities available to purchase real estate at great values. One of the quickest ways to make money in real estate is to buy a property that is outdated or need repairs, perform the needed improvements, and sell the house to pocket a quick profit.  This is known as a fix-n-flip in real estate parlance.  The key in any real estate investment is to acquire the property at a good valuation.  Veteran real estate investors live by the motto: be a hard buyer and an easy seller.


AVAILABILITY

 The number of houses in foreclosure or short sale is at an all time high, providing tremendous opportunities for astute buyers to turn an old house into a profit.  Simply typing foreclosures into any Internet search engine will identify more properties than you will ever need to become wealthy.  Narrow your search to specific cities or neighbourhoods to make the best use of your time.  The majority of foreclosed real estate will require repairs or updating to maximize their value, but that is exactly the type of property that makes the best investment.  As Warren Buffet once explained, “don’t show me the best place to invest, show me the worst”.

VALUING

Unless you are an experienced real estate investor, you would be wise to enlist the services of a buyer’s agent to assist you in your evaluation of cheap properties.  A great value in real estate does not depend on price alone.  Buying a property for $100,000 in one area may be a great value, while paying the same amount in another neighborhood would definitely be overpaying.  A buyer’s agent will steer you towards properties that have better value and into areas that have the greatest potential for increasing values in future.

INSPECTION

Once you have identified a potential investment property, engage an independent home inspector to thoroughly inspect the property for any hidden problems or major defects.  Serious problems are not necessarily a deal breaker, but if present, can give you tremendous negotiating leverage to obtain an even better purchase price.  If the inspection gives your investment a clean bill of health then you have the peace of mind knowing that your investment decision was sound.

DECISION TIME

Remain completely objective in your search for real estate investments.  A successful real estate investor is able to value properties on their individual merits as a potential investment.  If a property does not have the potential for significant profit, simply walk away from the deal and begin your search for a more appropriate situation.  Chalk this one up as a learning experience to help you make the best decision possible on future properties.

PATIENCE

New investment opportunities come along everyday as lenders work their way through their backlog of foreclosed real estate.  Constantly be on the lookout for potential investment properties, because like buses, sooner or later one will come along that will take you to where you want to go - down the road to riches.

Byline:  

Aaron Gormley understands the importance of developing real estate whether through refinancing or rebuilding, and he recommends purchasing excavators for real estate properties.