How to buy houses for auction

Buying a home is a very important decision in a person’s life and it is imperative to put in time and effort to do proper research of a property before you buy it. When you plan to buy houses for auction you can get an incredible bargain as you will be able to buy property much below the market value. I most cases the houses for auction are properties sold by the government or by lending institutions who have repossessed a property where the owner has stopped paying his taxes or his mortgage payments.

If you have never bought houses for auction then you need to have complete information on how to buy houses for auction. You will find a range of properties at the auction; many of the properties are repossessed while others come under the hammer because the sellers want to sell their property quickly. Many of the repossessed properties may not be in good shape as the mortgage lenders do not want to spend money refurbishing the place. To know more about how to buy houses for auction read the following information.

You should always go and see the property on auction with your own eyes or hire a professional to go and see it for you. A picture in a glitzy catalogue will always look appealing but you need to go and see the location and the actual condition with your own eyes. There is no point buying a house in a location where it will be hard for you resell it or even get tenants.

Calculate the actual cost involved including the other costs such as refurbishment costs, lawyer fees, Insurance costs etc. Professional fees can add up and can eat away into your margin so consider all the costs involved before committing yourself.

You should set a ceiling to how much you plan to bid and never exceed that amount even in the heat of the moment. It is very easy to get swayed by the excitement at the auction and end up paying more than you actually intended to. There will always be other auctions and other properties you can bid for which are in your budget.

Reading the small print of the contract is extremely important. Read the contract terms and the auctioneer’s terms and make sure what that is. Find out what the terms and condition say because once the hammer falls you are obligated to satisfy the terms of the contract.

Reach the venue of the auction early so that you do not miss any important opening announcements made by the auctioneer. Auctions venues are busy and crowded and you will get a good seat if you reach early. Auctions can be intimidating and exciting at the same time so you need to pay attention at all times. Decide on how you plan to bid and stick to it, it could be by show of your hand or just a head nod.

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Managing your buy to rent property

Property investors use the strategy of buy to rent property for long term wealth creation. Buy to rent property is a very profitable business when handled correctly and can lead to a steady flow of income. Many property investors go this route and the rent acts as a supplement to their income and many earn enough to even retire from their full time jobs. Becoming a landlord and handling buy to rent property is a cumbersome process and not many people are ready to become landlords just because they have purchased a buy to rent property. One requires a management style that is sound and accepting the fact that it is important to manage tenant issues so as to keep the cash flow from your investment running smoothly. The key is to letting out property to tenants quickly and cheaply and minimising the situation of rental void.

The first thing to do is to find a tenant for your buy to rent property. You need to narrow down on the type of tenant you are looking for, whether you are looking for students, families or single people etc. Many a times the location of your property will help you determine the type of tenants, for instance, if your property is close to a university or college then it is best to target students as potential tenants. You will face different type of risks with different type of tenants. Depending on the type of tenants, you can let out your property furnished or unfurnished. Choosing the right tenant involves conducting thorough background checks of tenants by doing credit checks and reference checks. You would want tenants who can pay you a monthly rent and or of good character. You should also ask for a security deposit when you sign the tenancy agreement.

Any buy to rent property is an expensive asset and it is a risky business when you hand it over to a tenant. Even though you have tenants in your property, the ultimate responsibility of the property lies with you. To minimise risks and expenses every landlord should purchase buy to let insurance which will cover the property and give you peace of mind. Buying the right insurance cover will help to ease the expenses you might face in the event of a fire or a serious leak. You can add additional benefits to the cover which will help you financially in case something goes wrong.

Choose a property management company if you would rather have someone else oversee everything. For a percentage of the monthly rent, the property management company handles everything right from screening potential tenants, handling rent payments and any minor repairs needed in the property. This is especially helpful if you live in another city.

Managing your buy to rent property well can yield good long term profit and the steady flow of cash will help you increase your property portfolio.

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Things to consider when buying cheap houses

There are many cheap houses on sale due to the increase in number of foreclosure houses after the economic slowdown. These foreclosed houses are a great opportunity to own a home for people who always wanted to buy a home and were not able to, because of the high price. Though buying cheap houses sounds like a bargain, not all cheap houses are a good investment option. Whether you want to buy an affordable home for your family or are interested in purchasing cheap houses just as investment options, there are some things you need to make sure to avoid losing your hard earned money on bad investments.

Condition of the property: It is necessary to conduct a thorough investigation of the property whether you buy the distressed property from the owner of the property, after bidding on an auction or even when you buy it directly from the bank. Condition of the home is an important factor when deciding if the property is a good investment option. Many times owners are not forthcoming about the structural and other defects as they feel that this might drive away potential buyers. It would be a good idea to take professional help to find out the estimated cost of repairs and use that to negotiate during the buying process. Also, you will be aware of what repairs need to be done before you move into the house or let it for rental.

Location of the property: Location of the property can be a major deciding factor before you buy cheap houses, as it is an advantage if the location is good. Whether you plan to stay in the property or you want to rent it out, it would be of help to have information about schools, hospitals, crime rates etc. You can use this information as a selling point when you plan to sell your house or let it out.

Expected potential returns: Always factor in the amount you will have to pay for repairs and other costs such insurance and taxes before you finalise the deal. Ask around and find out the rental rates in your neighbourhood and find out the costs for repairs and renovation. Only if you are able to make a profit after taking in the costs, it is advisable to go through the purchase.

Mortgage costs: If you plan to take a loan from the bank to purchase cheap houses then it is important to consider the cost of the bank loan when buying the house. If the home you have purchased does not give you the desired rental rate, it should not happen that you have an additional burden of mortgage payment. Purchasing such cheap houses would become more of a liability than an investment.

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Purchasing Investment properties

Are you interested in buying investment properties which will help you make money? Buying property is still considered a good investment even in these times of financial uncertainties’. Buying property and becoming a landlord by letting it out is a good way to build your credit rating. Plus your tenants pay back your loan for the investment properties. Whenever you plan to buy investment properties, you need to do a lot of homework and research about the property at hand and also about the prevalent market conditions. It involves a lot of hard work and time as this is not a short term job being a landlord.

The first thing on the agenda is to have a good credit rating and have some extra money on hand which you can use for your investment. This way, even in the case of an adverse market conditions your life is not drastically affected. And if all is well, then you will end up with a sizable profit from your investment.

The next thing to do is find a good investment property and try to get a good market price. The key is to make money even when buying any investment property. Before purchasing the property it is important to check and see if the property needs to undergo any refurbishment such as new carpeting, new roof, and new appliances etc. Even if the property does not need any immediate repairs it will need repairs in the long run. Once you have purchased the investment property and put it on rent, it is time to start putting aside any excess money you have left after paying your loan. This money can be used for any repairs the property might need in the future.

Apart from residential properties you can also invest in commercial investment properties such as a large office, a restaurant or an office building which can be leased to a business. While buying commercial investment property the location of the property is very important such as the town centre or any place which is close to a market area. With a commercial investment property, the potential to make money is higher but you have a higher potential for repairs because the number of people occupying that space is higher.

Whichever type of property you choose to invest in, just ensure that you are getting the best deal possible. When giving your property on rent, remember to factor in all the additional expenses that you might incur before fixing on the rent amount. The rent should cover all your expenses such as repairs, maintenance, insurance, taxes etc.

Buying investment properties is quite low risk as the property prices inevitably increase over the long term. Also, after you have sufficient number of investment properties, the income you earn from the properties can act as supplement income or you can even retire on it.

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How to be a property investor

Many people are faced with this question when they are starting out in real estate business, ‘how to be a property investor?’ A good property investor is someone who can make a solid profit in the real estate market in any given market conditions. He is the one, who will know the pulse of the market and know when to buy and sell property to turn a considerable profit in every venture. A property investor finds good property below the actual market value that will help to generate long term or short term income.

A successful property investor will have loads of patience and dedication to learn the tricks of the trade. He will be ready to put in hard work and have an appetite for trial and error, and accept setbacks to understand the ways of the property market. This profession is not for the weak and fainthearted. Investing in the property market needs continuous learning and excellent people skills on the part of the property investor. Here are some tips on how to be a property investor.

1) A savvy property investor knows that this game is all about number first and that the numbers have to add up. The key to making money in real estate is when you buy a property and not after you have already bought it. It is necessary to do complete homework before you buy any property and take into consideration any additional costs you would incur in repairs and maintenance before you arrive at the profit.

2) A newbie investor should always start with a small investment and deals that are less risky till the time they get a hang of the process. As the investor gets more experience, he can move on to complicated deals.

3) Keeping yourself emotionally distant is practical when purchasing property. Most new investors get emotionally attached to a property which clouds their judgement and they forget all about the numbers. If you plan to invest in a property it is important to remember that you should be able to make a huge profit on it. Keeping this in mind, always buy a property which a buyer or a tenant would love to stay in and is close to amenities and transport links.

4) It is very essential to have a strategy in place when you purchase any property. You should be clear as to what you plan to do with the property after you have purchased it, whether you plan to rent it out or resell it.

5) If you don’t know how to do a certain task, it is wise to take help from experts. You can hire professional building surveyors, accountants, lawyers, contractors to make your work easier.

6) Keeping yourself updated and doing your homework on the property market will ensure that you are one step ahead. Knowledge of current market conditions will be of tremendous help when you plan to purchase any property.

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Investing through property funds

Property funds are one of the best ways to invest your capital into real estate and property portfolios. By using a property fund you not only have the flexibility of investing amount of money you wish but also that the fund will be managed by experts who have all the relevant knowledge. Whatever money is raised in the property funds, the fund managers will decide the best way to invest the money so as to maximise the returns. Another benefit is that most of the property funds have a fixed investment timescale so you are aware as to when you will get your money back.

Rather than doing all the hard work of researching a property when you actually buy it, you can leave all the hard work to the fund manager who will do all the legal paperwork and research on your behalf. The fund manager ensures that he is investing your money in the best possible place as he gets paid only when the fund makes a profit. When you invest through property fund, your money is invested in various different properties to build up a good property portfolio. A property fund usually has a combination of short term, medium term and long term investments. Such a fund structure is dynamic and proactive and will cover many different ways of investing in property.

A property fund has a considerable more net worth compared to when an individual buys property. This gives the fund much more buying power which means it can buy more number of properties at a faster pace and at a better price and which will benefit all the investors of the property fund. Many funds can also borrow money from banks to increase their buying power which means they can buy more number of properties and as such the investors will get a considerably higher return on their investment.

Investing in property funds does not involve much of hard work on the part of the investor; all of it is done by the fund manager. The investors receive regular updates about the investments being made by the fund and their status. They will receive detailed workings of each of their investments and the amount of profit gained from each property.

Whether you are a newbie investor or an experienced investor, property fund is a flexible and simple tool by which you can invest in property. With a property fund you have a readymade property portfolio and it is a hassle free way to diversify your existing investments.

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Practical tips to become an excellent property investor

When you are starting out as a property investor, the whole process can seem complicated and daunting. As a newbie property investor, there is that excitement of embarking on a new adventure coupled with the anxiety of not knowing the ups and downs of the trade. To be a successful property investor means setting up goals and deadlines and checking your progress on a regular basis. A smart property investor will invest in educating himself with the current trends in the property market to stay abreast of the competition. He will read magazines and blogs on property investment and attend conferences and seminars to brush up his skills and knowledge.

There are some common mistakes which new property investors make:

1) Many property investors pay too much for a property. A wise investor will make money even while buying the property and not only when they sell it. They will increase the value of the property by doing renovations and refurbishments and then sell it at a higher price.

2) Many investors buy too many properties together and spread themselves too thin. It is important to first understand the entire process of purchase end to end and then replicating this process in other real estate deals. This way there will be less mistakes and the investor will be able to deal with each property without getting overwhelmed.

3) Investing in a property because the investor gets emotionally attached to it. It is important to use a balanced approach when planning to invest, by carefully accessing the potential returns from any property based on the price offered by the seller. Also take into consideration the location of the property in terms of letting out or resale potential.

4) Not having a proper management system to keep track of all their properties. Every property investor should have a management system to keep a record of their investments, whereby they know how much money is coming in and out for mortgages, tax payments etc.

5) Not doing proper research and having an action plan ready. A property investor needs to know the market thoroughly and know the movements in the market condition and have an action plan ready to meet the changes in the market condition.

6) Not doing any reinvestment in the purchased property. A property needs renovation and repairs just like a vehicle and if left unattended for too long will not give you good returns on your investment. If your property is left neglected, it can considerably reduce the value of your investment.

An intelligent property investor will have a carefully planned investment strategy. He will have his goals and deadlines clear in his mind and will make it his job to do thorough research to continually increase his knowledge of property market.

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