Making a purchase of Investment property in the United States is a little different than purchasing a personal home. American real estate agents can help with how buying investment property works.
When you are buying a residential home, you are buying on pure emotion. This is a place you will raise your family and you will have a lot of reasons for purchasing a particular home. These reasons will be centered on how your family lives their lives and things they are looking for.
When purchasing investment property you want to keep emotion out of it. With investment it is more about the ability to cash flow and or the ability for Growth.
You first need to have a very clear picture about why you are investing and what you are looking for. Until you get clarity to this will you ever make a purchase. I am often told by so called investors that they are looking for “any property that makes sense” this tells me they do not understand investing.
There are literally dozens of different objectives people have when they invest. Some want cash flow, some want appreciation, some want a safe haven for their money, some want to have the investment double as a second home. Some want a place for their child to use while attending college. The list goes on and on. It is paramount you understand what you are looking for out of your investment BEFORE you can get your objectives accomplished.
When you look at the property, make sure it is capable of producing the returns you have set for your criteria to be met. Make sure you have an exit strategy established for the property even if it is a buy and hold investment (this is my favorite). You may not sell for many years, but at some time when you do sell, will it be sold to a home buyer or another investor. This may dictate what type of areas you wish to make your purchases in.
In the Contract include verbiage to insure that any rental deposits and leases all get transferred at the time of closing. Make sure you have an understanding if the property has any leased equipment such as leased coin operated equipment, etc.
When buying property that is already producing income, ask to see a copy of their tax record to insure that the income they state they are getting is truly what they are getting. The tax report shows the accurate figure. Most important remember that the property is worth what the property generates in income NOT what the property is SUPPOSED to generate in income when it is fully occupied and rented for top dollar. When you purchase on the true performance price instead of the expected Performa you win. This is a mistake most people make.
A great Realtor can give you incredible clarity into these types of values. If your Realtor is not checking into all of these items, you may need a new Realtor!
The Equity Builders Group specializes in helping overseas buyers find and purchase investment properties in the United States. Please download our ebook or give a call today to find out more! 941-718-7761