Investing in real estate is an art form. In many cases, investors learn through experience – but it doesn’t always have to be that way. You can learn from other successful investors, too.
So how do you know if you’re in danger of paying too much for an investment property?
Step one is to work with a talented Realtor® who won’t steer you in the wrong direction. Have your Realtor analyze the property and do a comparative market analysis before you get your heart set on making an offer – and for that matter, don’t get your heart set on making an offer. Remember that investing is a business, so keeping your emotions detached from the transaction is always best.
Many experts recommend making a checklist that helps you keep your priorities straight as you are looking at investment properties. Your checklist may include things such as:
- A price range
- Renovations you’re not willing to do
- Number of bedrooms, bathrooms and other rooms you’re willing to work with
- Locations that you will ignore or look for properties within
Having a checklist can help you cut down on the amount of time you waste considering properties that really aren’t a good fit for you.
Many investors make the mistake of looking at a handful of properties, making an offer on one of them, and then buying it. Instead, take your time – finding the perfect property to rehab isn’t something you need to rush, and the time you take on it now will pay off in the long run.
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