How to Make Money in Real Estate Investing?
There's no huge secret to making money with real estate investment. All it takes is
some study, some preparation, and some elbow grease.
These days, when people talk about making money with real estate, they're generally
talking about the practice called 'flipping houses'. Investors buy property below market
value, fix it up, and sell at or above market value. Depending on how good a bargain
you got in the first place, and how good a deal you can drive when you're selling, you
can realize anywhere from thousands to tens of thousands of dollars in profit on every
deal you make. In order to do that, though, you have to know how to find good properties
at low cost, where to get the best terms on loans, what improvements will net you the
most increase in value and how to sell for a high price.
Finding Low Cost Properties to Buy
Read the legal listings and find foreclosure notices. You can often buy a property
that needs little fixing up from an owner facing foreclosure.
Attend foreclosure auctions, and tax arrears auctions. Those are also announced in
the newspaper legal notices. Keep your eye on them.
Get to know a few good realtors. They can often steer you toward owners who have to
make a quick sale and are willing to take a lower price for ready cash.
Know your market - from the inside out. Neighborhood/local knowledge can help you take
advantage of unexpected 'blips' in the real estate market. An example: you'll find
people looking to sell a house few months after a major company closing.
Tips on Getting the Best Bargain Price
Learn to recognize a good investment property - one that needs only minor cosmetic
improvements, and is in a good neighborhood.
Learn to negotiate without being condescending. People would rather sell to someone
they like - so be friendly, helpful - and firm on your highest price.
Get pre-approved for a loan so that you can offer a quick sale. Having your financing
all set can be a major bargaining chip when someone needs to sell fast.
Invest Improvement Money Well
Attend to the basics. Deal with minor repairs (you wouldn't buy one that needed a
major overhaul, right?) and cosmetics like paint, floors and trim.
Know which improvements will pay off in increased value for your property. In
general, kitchen pick-me-ups are your best investment.
Study home decorating and design magazines for color and decorating ideas. Keep the
decorating spare, but attractive.
Get Your Highest Price
Sell at the right time. Spring and Summer usually brings out home buyers who are
looking to get into a new home before school starts - it's a good time to sell.
Be prepared with an arsenal of non-cash inducements. Offer to pay closing costs,
provide your own inspection to save the buyer money, or include fixtures like air
conditioners or appliances in the sale price.