Jeff Adams

Should You Stay SIngle?



Posted: Thursday, September 10, 2009

by Jeff Adams
RealEstateWebProfits.com

If you are looking to invest in residential property and are also looking for the quickest return on your initial investment, chances are that investing in single family homes would be your best bet. The number of houses in foreclosure in the current market has steadily been increasing over the past few years, so taking advantage of the real estate opportunities available definitely gives you an edge as an investor.

Single family homes are good investments for those interesting in buying a home, fixing it, and selling it as quickly as possible. This process, also referred to as "flipping" has gained much popularity among investors because it is generally a quick and stands to have a great profit margin. They are also good investments for first time home buyers. Some may find that it would be in there best interest to live in the home and gradually make improvements on it, whether or not they decide to sell it in the future. It makes a great deal of sense to do so if the market conditions are not going to offer the potential to make a profit on their initial investment.

As a general rule of thumb, location of the home is very important. Buying the ugliest house on the block in a good neighborhood has many advantages to offer. Finding such a deal that only needs minor repairs and a few cosmetic enhancements is even better. It is amazing what a coat of paint and a general clean up can do for the value of a piece of property. The ways the house looks on the exterior is also important. The home's curb appeal makes the first impression on a potential buyer.

These investments are also profitable for those who wish to use them as rentals. There has also been an increase in the number of people who have opted to rent instead of selling, considering how much the prices of homes have been declining. In addition, there are also many people who have decided to rent because they just cannot afford to purchase a home, due to the economic downfall we are currently experiencing.

Offering a renter a lease with the option to buy it in the future should also be a consideration. Because now not only do you have a vested interest in the home but so does the person living in it that may in the future decide he/she would like to purchase it and officially become a homeowner. For this reason, this type of plan usually comes with the perks of less money out of pocket for home repairs and improvements and the potential appreciation value of the home.

Overall, this type of investment does have the potential to be quite lucrative. You just have to be well aware of what it entails and make sure that you are taking any and all necessary precautions to make the deal as cost effective as it can be for you. Make sure you know exactly what the purchase price includes and the closing costs attached to the deal. You should be able to cover the carrying costs which includes taxes, the mortgage payment, property maintenance and improvements (this can be negotiated if there is a rent-to-own situation), and insurance. Taking into account all of the costs involved will only benefit you in the end.

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