Investment Properties - Finding the Right Property at the Right Price

Investment properties provide rental income to their owners. You need to be cautious with any property that you purchase. This is especially true with investments since you are expecting a good return on your money. Determine why the current owner wants to sell. 

The best situation for you is finding the motivated seller. If someone is getting a divorce or moving for a new job, they need to sell their property within a certain time frame. This gives you more leverage in your negotiations. With today’s real estate reality, this is especially true if people are behind on their mortgage payments. You can often find properties at a bargain with the right seller.

Find out how long various investment properties have been up for sale. This will give you more indication of the seller’s desire to get rid of the property. With more than a couple months on the market with more than one price reduction, you may have a bargain on your hands. If you put in an offer lower than current asking, you may find you can get the property for less than the current asking price. Negotiation is vital to getting the best price. 

Check out the house and compare it to ones in the neighbourhood. You do not want to purchase the largest, highest price one in the neighbourhood. Find one that will hold value with its direct competitors. Look through the neighbourhood and count the real estate signs. If there is an abnormal amount in the area then that is a sign the neighbourhood's home values are declining. With direct competition, most sellers will lower their price to get rid of the house. Make sure the neighbourhood is where someone would want to live. If it is rundown or near poor schools, it may not be a good place to put your money. Investment properties need to appreciate, not depreciate. 

Drive through the neighbourhood after normal business hours. That is when most people experience the true neighbourhood. Many people are home. You can see what the traffic is like during rush hour. What is the neighbourhood like on a Friday or Saturday night? Is there a big party scene that is not evident during the day? That is what the residents experience all the time. That is the true measure of value of investment properties. You want your money invested where people want to live. If you cannot find people to buy or rent, you are wasting your time and money.