When investing in property in the U.S., in order to reduce risk, buyers basically pay attention to the vacancy rate, mortgage, crime rate, average income of residents, neighborhood and housing facilities condition of the relevant urban area before purchasing.
And when renting, landlords will carefully select tenants, treat them well, and stick to their principles on rent in order to have a stable return on investment.
The following are other factors that are easily overlooked and can help investors reduce their investment risk
1. Don't be impatient.
Before looking at real estate ads, think through what you are buying for.
Is it for a steady rental income? Is it to be renovated and then sold? Is it to be rented out first and then retire here for the rest of your life?
It is very important to clarify these questions.
2. Consider selling your home when you buy it.
Before finalizing, think about who will be the next buyer in 3, 5 or 10 years.
If the next buyer is an investor, your selling point is a good rent. -
If the next buyer is a local, there can be many buyer candidates, but they like a safe and clean school district home.
3. Know the buyer's agent.
Buyers always do a lot of research on real estate, but rarely do they do research on the seller's agent.
Every agent's registration number can be found in addition to the client's inquiry number.
All agents who market real estate must provide company, bank and accounting inquiry numbers.
Don't worry, because most agents will assume you are sincere about buying a home when they hear you ask for this information, and they will be happy to give it to you.
4. Learn more about the community.
This is very important.
If you are buying a property in a certain neighborhood, then you will need a rental list to determine the number of vacant properties and foreclosed properties.
You will also need a copy of the homeowner's license to see if there are many deferred maintenance or bad debts around.
If you can't buy these materials yourself, you can ask an expert to do it for you.
5. Have an independent inspection report.
It's possible that the property looks good and the neighborhood is nice, but that doesn't mean there are no problems inside. You need to ask an expert to determine if the air conditioner is intact, if the wiring is safe, if the roof is solid, if there are problems with drainage, if the house is damp, if the kettle is damaged, etc.
Once these problems are overlooked, it will cost a lot of money to fix them later. These inspections are easy to arrange and inexpensive at 250-300 USD.
Note that inspections can only be done after booking and must be completed within the deposit period.
6. Find a good property manager and real estate agent.
Real estate managers who can properly manage investments and tenants are rare. Adding tenants or extending the lease term will incur more costs, so these should be taken into account when calculating costs.
The more capable the property management company, the higher the tenant satisfaction and the longer the lease term. And too much tenant turnover can consume more costs.
7. Respect tenants, but be strict with them.
The best landlord should keep the tenant satisfied and take good precautions.
If the tenant has been cooperative, the landlord should respond to his requests so that problems can be easily solved.
If the tenant asks to fix the house, don't refuse or delay, otherwise it will be time-consuming and costly. Be prepared to pay for this repair and keep track of all expenses.
Do not indulge the tenant in rent arrears. From day one, tenants are strictly required to pay their rent on time. If the tenant does not comply with the lease, evict mercilessly.
8. Try to choose the best property.
Try to choose the best property in a beautiful neighborhood with a moderately priced property.
If the high-rise two-bedroom comes with an area or a large balcony, it is most suitable.
If the previous owner spent a lot of money on the flooring and kitchen, the buyer can accept the extra cost offered by the seller at a lower price than the previous investment.
If the neighborhood has a lake, choose a house on the lake. If the neighborhood has large amenities, such as a pool, tennis courts, barbecue area, etc., and is only a little more expensive than the average neighborhood, go with the neighborhood with good amenities.
9. Avoid too good a deal.
If the deal is too good to be true, it must not be cheated. It may be a really good deal and you happen to be the first one to find it, but the likelihood is too small.
More often than not, someone else has found this great deal but hasn't sold it yet, and there must be a reason for that.
10. Keep up to date with real estate.
Sometimes people buy a property and rent it out and don't care, but then they find out a lot of problems.
So always keep an eye on it and solve problems as early as possible. Keep an eye on the flow of money in your property, update your documents and records every month, and make sure you have tax forms every year.