What Type Of Investment Property Am I Interested In

Category: Finance.

Deciding to buy investment property is one of the best decisions you will ever make for your future. There is a process that you have to learn and lots of information to digest.

However, it isn' t something you can decide to do one day and then rush out and do the next. If you think you have done that already and you are now prepared to go out and make your first purchase, here are 5 questions to help prepare yourself. Are you interested in a duplex, multi- unit complex, or perhaps just a single family home? What type of investment property am I interested in? Are you interested in commercial real estate? How you answer this question will determine other things that you do later, such as how you go about financing your investment. What about raw land?

It is also best to choose one direction to pursue so you don' t go on wild goose chases and so your team knows what they need to clue you in on. Are you going to invest in the city where you live? Do you have a specific area that you are interested in? If not, what part of the nation are you interested in? Ken McElroy, author of" The ABCs of Real Estate Investing, " calls this Level I research. The Internet is the best resource for determining what area of the country you would like to put your time and money into. Later, once you have decided on a part of the country and a city in which to look, you will need to decide on a neighborhood.

Do I have a plan to pay for it? You will discover that during McElroy's Level II and Level III research. The type of property you are looking for( as well as your existing equity) will help to decide how you can make your purchase. However, even if you don' t have the money to pay for it, if it is a investment property that has made money in the past, the bank will probably give you the finacing you need. If it is a smaller investment such as a house, you may choose to pay for it outright. They know that they will get a ROI regardless of what happens to your investment. Is my team in place?

If you are looking at a larger piece of land that you can' t afford outright, you will probably be able to get partners or other investors to contribute. It's just too hard to be successful at this without a good team. You won' t have enough time to become skilled at real estate law and accounting, plus broker your own deals and manage your own properties. That is simply because of the large amount of work involved, and so many disciplines of knowledge involved, that you simply can' t do it all by yourself. It is necessary to delegate. After that, you may also need appraisers, a surveyor, tax consultants, a structural engineer, an estate planner, an architect and more. That is why McElroy recommends you start with an attorney, a broker and, an accountant a management company.

What is your repair budget? Knowing this will help you determine what areas to look around in because some areas may be full of old buildings or some newer buildings may actually be in need of a lot of upgrades. This is very important. You will want to what you are getting yourself into and whether you can handle it. Once you embark on your real estate investing adventure, you will discover a never- ending list that you will need to address. This is by no means a complete list of questions.

But these will get you started on the road to asking yourself the best questions. Sometimes asking the right questions is more important than the answers themselves.