In our series, Finding the Right Property for Your Goals and Budget, you’ll learn how to find a property that is the right fit for your portfolio. We take you through every single step and show you how to avoid a bad deal.
Questions to Ask Yourself Before You Start Your Search:
1.) What is the end goal? Where are you headed?
Make sure you are beginning your search with the end in mind. This may seem obvious, but many people start planning their investment strategy by picking out a particular house, without even knowing if that particular property fits correctly into where they want to go. Why are you taking on investing in real estate?
2.) What kind of strategy do you want to use?
Deciding what strategy or strategies you’d like to use will greatly determine what type of properties you’ll want to look for. Are you looking to buy and hold long-term? Just starting out and interested in house hacking? Maybe a quick flip? What about BRRRR (buy, rehab, rent refinance, repeat)?
3.) What won’t you do?
Are there areas of real estate that you simply do not want to mess with? This can change in the future, but winnowing down will be helpful for your search. Do you want to consider condos? What about commercial real estate?
4.) What kind of properties DO you want to buy?
In conjunction with the questions above, what properties DO you want to purchase? Do you plan to buy single-family homes? Small multifamily properties? Apartment complexes? Maybe all three or something else?
5.) How often will you buy?
Making sure one purchase sets you up properly for the next and doesn’t kick you off your timeline is key. Do you plan on buying one property per year? What about one in year one, two in year two, etc.? What if you purchased one apartment complex every five years? What would that look like?
6.) How are you going to finance it all?
Finally, knowing how you will finance your deals is a good idea to have nailed down prior to your search beginning. Do make extra income from your career that you can dedicate a part of to purchasing properties? Are you rolling over money from other investments? Can you purchase all cash? Or will you need to look into creative financing? This can be the most difficult part for some people, make sure you explore all your financing technique options.
Congrats on answering all of these questions and hopefully it sparked some additional self-analysis that will help your property search! Next week, we’ll take a closer look at whether you are a “location” person or a “property” person.
Parker Properties, Inc.
With a background in property management, I know which homes make the best investments and excel at managing those properties for you after we close. My meticulous eye and high standards are applied to every aspect of caring for your home & your investment.
PO Box 1273
Kamas, Utah 84036