Turning a House into
Someone's Home
You've likely seen it on TV. I mean, it's nearly impossible to miss a dozen reality shows devoted to the subject. Cute couples and successful singles investing in homes, remodeling them and "flipping" the property to make a profit. And it all happens in neatly bundled 30-minute episodes. Is that reality? Hardly. But with the right guidance, it is possible to turn an investment into substantial profit. save you money.
Great investment homes can be hard to find. They also take a lot of time and a great deal of money to be successful. In order to choose a smart investment property, you have to understand the property's value, know how long you can hold the property and decide whether to rent or lease the home before you sell it.
Residence vs. Investment
Purchasing an investment property is quite different from buying a residence. When you purchase your primary residence, you have to balance your personal tastes with location, emotions and other factors. Investment properties, on the other hand, are all about financial return.
Setting Your Goals
Are you looking to make money in a hot market? Or do you want to buy a property that will provide you rental income for years to come? Long-term investments require more maintenance and costs on your part, while short-term investments present other risks and benefits. Together, we can discuss the pro's and con's of your individual situation.
Investing Takes Time
In addition to any maintenance and upgrades you put into the property, selling the home takes time. You can't expect to sell your property in a few days, or even a few weeks. Sales can take a few months or more. In fact, unless a buyer is paying with cash, you will have a minimum 90-day holding period to cure the title due to financial guidelines.
Understand Your Financial Abilities
It's possible to make a lot of money in the Orlando real estate marketplace-and now is a great time to invest. But before you jump into anything, you need to understand your personal limitations. Make sure you are financially stable so you don't ruin your credit and become a slave to your investment property.
- Here are a few financial questions to consider:
- How much money can you reasonably dedicate to the purchase of an investment property?
- How much money can you dedicate to the renovation and maintenance of this investment?
- Will you have to make major improvements? If so, have you accounted for permit costs, architect's fees and other expenses?
- How much of your own time and labor are you willing to invest in your property? Can you afford to hire contractors if you cannot complete the work yourself?
- How long can you hold a property before it becomes a financial burden to you?
- How much will the property appreciate or depreciate in the time you intend to hold it?
- If you decide to rent or lease rather than sell the property, will you pay a property manager to oversee tenants and maintenance? Do you have funds allocated for emergency repairs to the property?