Whether is it your first turnkey real estate property or your tenth, evaluating the property can be an arduous task. What are some key things to look for when purchasing your real estate investment property. There are a few things that can allow you to make the best decision when it comes to property investing.
There’s no shortage of investment opportunities. You’ve heard it before but “the deal of a lifetime comes along once a week-” assuming you’re looking! So, we prioritize our time, and when a property is presented to us, we first determine how fast we need to act. If it’s been on MLS for 4 months, we’ll stick it on the back burner no matter how appealing the numbers.
Crunch the Numbers
When I see a property in person I sometimes become…attached. I’ve caught myself saying “Ooh I love those windows!” and “check out the well-manicured lawns, it must be a nice area!”
The trouble is our investors don’t care about any of those things. Most of them will never even see the property – they just want a check every quarter.
Why waste my time? I don’t visit at a deal until I get actual numbers. One day, when we’ve accumulated a large cash flow base, I might consider more speculative deals, but that is not this day. So, after I get the number and they make sense is when I will visit a property. Generally speaking we try and find properties that will generate an ROI of over 10%, ideally somewhere around 18% to 20%.
Make the Decision
After you have gathered up all the information, that includes the financial and neighborhood research. It is time to decide if the property is right to invest in. Typically, as long as the timeline and finances are a smart move then I will make steps to purchase the property. The best advice I can give would be never jump on anything too quickly. Always work the process and think about what makes the most sense. That is the key to longevity in real estate investing.