Archive for February, 2008

How to evaluate real estate options.

February 6, 2008

In this terrific buyers market, you must have a plan to evaluate your market conditions prior to making an investment decision.

Just because a property is cheap, doesn’t necessarily mean it’s a good deal.

Many times cheap properties may look like an appealing investment, but have obvious defects once you study the market. The property may be located in areas with high inventory and low demand. It could have to few bedrooms or baths. Maybe it’s located on a busy street or next to a busy commercial property. In a buyer’s market these properties may continue to lose value and be extremely hard to sell. Always look for properties in areas with strong sales history and a lack of inventory to base your investment decision.

Don’t base your purchase price only on current available inventory.

You will find important info by studying recent market activity. Base most of your purchase decision on recent closed sales. Closed properties will give you a picture of the popular styles selling, average sale price, number of bedrooms and baths, finished footage and market time. You will typically see an obvious difference in types of properties selling and properties sitting on the market.

Location, Location, location!

Know where properties are selling. Look for locations with low inventory and high demand. Many buyers base there buying decisions on a location such as a school districts, convenience to work and other amenities. These buyers will typically pay a premium for location.

So have a plan to evaluate your market conditions prior to making any decision to purchase an investment property.

Happy investing! Mike