Real Estate Realities
LOS ANGELES—Its always a great day when you decide to make an investment in your family’s future. Especially when it means deciding to buy real estate as a new home or perhaps as an investment property.
Despite how the economy is, real estate is one of the safer investments you can make as long as you use common sense and remain realistic about your financial goals and expectations for your new purchase. So be smart when it comes to buying property. Real estate is not for the faint hearted. There are many potential challenges that you may face. And without a good game plan, all your plans could be for naught. Here are a few tips:
1. Find out if you can qualify for a loan.
You must pre-qualify for a loan which will determine if you can even buy a house. It’s a simple rule, but many wait too long into the process before realizing they’re unable to qualify. Even after you do qualify for a loan, you will find out just how much you can afford for your purchase.
2. Find a good realtor that knows the area or community you’re interested in.
The realtor’s knowledge of neighborhoods is invaluable when it comes to buying a home. Knowledge of local schools, closeness to noisy railroad tracks and safety of the area is especially helpful. But picking the right real estate pro is also key when it comes to finding the kind of home suitable for your family. Getting a solid recommendation from other professionals and others who’ve worked with an agent are the keys to finding a good realtor.
3. Know how the buying/selling process works.
Your realtor will guide you through the process in the beginning, helping you learn what you need to know about the various issues that will undoubtedly come up as things move forward. You’ll learn what the contract you’ll be signing will contain as well as how to look for the right properties, making an offer, financing and other issues.
4. Be realistic
Look for properties that you know you can afford. Don’t go after properties that are out of your financial range. It’s no-win situation and you’ll end up wasting a lot of time and effort. You must also be cautious and not simply fall in love with a property because of its appearance because it may hide many problems that may end up costing you dearly in the end.
5. Go long
Despite what the flipping houses reality TV shows say, when looking for a home or property, go long and not short. Purchase the home for the long term so you can build value and create equity so that when the time does come to sell, you’ll have a nice profit to look forward to. You just don’t make that much when you go short.
6. Look at all markets before you buy
There’s a lot of talk about buying foreclosures, but there’s no guarantee you’ll get a big discount with a foreclosure. A lot of the time it just doesn’t happen. The same is true for fixer uppers. So don’t just look at the foreclosure market or fixer uppers. Look at all aspects of the markets until you find the best property for your needs.
7. Be ready for added costs
Paying inspection fees to have the potential property examined for problems can be expensive, but worth the cost. Learning potential insurance, title and other costs will also help you make a decision on the property on whether you’re willing to take on these costs.
8. Other properties
If you’re looking at rental properties such as a home or apartment building, these also have some risks that need to be properly examined and analyzed with your realtor. Buying property will likely be the biggest investment you’ve ever made so be diligent, work with your realtor and be a smart buyer.
David Rosenfeld is a Real Estate broker and president of Advantage Real Estate, a Real Estate and investment firm in Santa Monica, and a Rotary Club member. He has more than 20 years experience in commercial and residential property investments and financial counseling. He can be reached at email@example.com.
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