Investment Properties

Investment Properties
05-27-08
Investment properties must be looked at for what they are, investments. You are buying the properties to make money. When you find a property which looks like a sound investment, do some research. It may sound like a good deal, but with some research into the market you may find it is overpriced for the area. Overpriced to an investor may not be overpriced for the market.
A home may be on the market for X amount of dollars, say $50,000. The home has 2 ½ baths and four bedrooms. There is 2,700 square feet of living space. In some markets this is a steal. In other markets this could be a rip off. You will need to know your market. Once you do then you can run a market analysis on the property. You may find it is the only house in the neighborhood like it. All the others are two bedroom bungalows.

If the market the home is located in is strictly a senior retirement area, you will have a hard time selling this property. It is not a good investment property. Could you move it a mile or two it might be. Where it is located makes it undesirable. You do not want a home no one else wants either. Do not waste your money.
Drive around the areas in which you would like to invest. Look at the other properties. Watch the people. You can tell quite a bit just from this action. You will know if the neighborhood has a lot of children and if it's someplace a family might want to live. You may notice it is all young people. These might be college students or newlyweds. It may be the perfect area to find a rental investment. Until you know the market, there is no sense in even looking at properties. You could find yourself stuck with an albatross.

When you are looking for investment properties pay attention to the amenities. Some areas have homes with pools that sell quickly. Other areas may have a home with a pool you could not give away. The market will dictate what sells and what sits. You want to find a house that will sell. If the three and four bedroom two story is what is selling, it would not be smart to buy a two bedroom ranch.
The amenities can overprice a home. Someone who thought they were going to grow old and die in a home may have went to town with remodeling. They may have put in solid cedar closets in the bedrooms. Cherry cabinets went into the kitchen. They may have installed a central vacuum system. This may have been a great thought when it was done. The price will reflect these improvements. The seller will most likely never get out of the house what they want because the amenities are too much.

You need to pay close attention to the appraisal value of the home. With the housing crisis spreading across America, some of the values have been over inflated. You will want to hire a private appraiser to determine what the true value of the home really is. You may be surprised at what this reveals.

Investment properties can make money for you if you understand the strategy behind investing. If you are just wanting to buy and sell because you think this is how it is done, then you may be in for a shock. Research what some of the more successful investors do to make their money. Experience can be a great teacher. Learn from their's not yours.

Mark E. Moebius
Miljonair Homes
Custom home builder St. Louis
3451 St. Albans Rd.
St. Albans, MO 63073
636.300.9000