Are you thinking about investing in real estate for the first time?

Are you thinking about investing in real estate for the first time? Are you wondering what you should do to find that next investment property?

There are some very important questions that every investor needs to answer before they move ahead with an investment that is as long-term as real estate can be.

Are you really ready to invest?

Real estate investing really isn’t for everyone. There are plenty of reasons not to purchase real estate and you have to listen to the voice in your head (or your spouse) before moving forward.

Some companies offer finished homes, with tenants, and they offer those homes at grand shows thousands of miles from the houses. Sometimes, people get caught us in the excitement and might go over budget, or buy a home that isn’t right for them.

What kind of return are you looking for?

Remember that the higher the return, the higher the level of risk. Houses in the city of Detroit that are completely turnkey and rented can bring returns of upwards of 20%, but there is great risk when that home is vacant.

Does it make sense to purchase properties that I do not live close to?

Sometimes it does. It really depends on how much homework you do on the area. Talking to local real estate professionals, or local property managers, about areas you are interested in just one step. They can offer you a great starting point, and may have homes available that are thousands less than you find online.

If you are going to buy properties in an area you are unfamiliar with, make a trip to the area, or at least research the area online as much as possible.

What kind of property should I buy?

That is completely up to your budget. Single family residential is the most popular, of course, but if you have the wherewithal to purchase commercial properties, or small to medium apartment complexes, they are always worth a look.

Are you prepared for the risks involved?

Real estate investment is a business, and you have to look at it as such. There is always a chance that your investment may lose money over a period of time, or need unexpected repairs and you have to be financial able to withstand those down times.

Vacant homes, winter freezes, floods, roofs, the list can be daunting, but they need to be kept in mind. No one is selling brand new homes as rental properties because the return would be so low, so your purchase will probably have a few items that are nearing their life expectancy.

It is so important to keep the chance of loss in mind.

Do you have a good plan in mind?

Have you thought through your short and long term goals when it comes to investing in real estate? Are you in it for the long haul, or are you hoping for a quick flip? That is important to the process.

Real estate investment can take some of your time, and it is important to not lose sight of the operations of your investment.

Should you manage your investment yourself?

Sure, if you are prepared to answer tenant calls at all hours, handle paperwork correctly, schedule maintenance, go by the home on a regular basis and more. That is part of the business aspect of real estate. It can become time consuming.

So, you may want to think about using a property management company. They usually charge between 8 and 10% of the monthly rent collected for a tenanted home. If you hire a licensed real estate broker as your property manager, they can also handle the leasing of the home, but expect to pay the first month’s rent as a commission.

In the long run, however, a local property manager can save you money by finding better contractors, knowing the local rental market and being able to give you tips on handling costs. For a $800 a month house, you are talking $64-80 per month to not have the headaches and having to have long talks with your tenants.

So, are you ready to invest?

We can help. We work with a group of home rehabilitation companies that will provide you with a great home. We would pre-screen the house for you and let you know our recommendations.

If you are looking at a home, it is so important to make sure to have as much information as you can. Sometimes, just paying a property manager a $150 or so to go to the house and do a complete site survey could save you thousands in the long run.

Never trust anyone that tells you that you don’t need to see the property you own. It doesn’t make sense, and you don’t want to invest your money when you know in your heart something doesn’t make sense.

Feel free to contact us at (248) 651-2700 or at www.aspectproperties.com.

“You manage your life. We’ll manage your properties.”