The challenge is that you can find the best investment property in the world; but if you don’t have the finances in place to make it happen – your vision as a property investor will never materialise to full fruition.
Interestingly, whilst the credit crunch has made it much more challenging for many people to obtain credit, the concept of a mortgage offers a great deal of security to the financial institution, as it is secured on the house itself. If you were to default on this particular line of credit, then the bank can take ownership of the property, meaning they have tangible recourse, unlike a credit card or personal loan – therefore, the options available to fund investment properties are more abundant than most people consider.
In terms of investment properties you have two broad options; firstly, you can purchase an existing property or you can purchase a piece of land and build your own. Either way, there are a number of tools available to help you plan your property development, as an example you can use specialist tools to create floor plans online or more generic terms such as Pinterest in order to gather and collate interior design inspiration.
However, before you get the finance in place and equip yourself with a plethora of time saving development apps – you need to find the property. There are three broad ways in which you can go about this, as detailed below:
- FIND AN ESTATE AGENT
The most conventional way to find a property is to use a real estate agent which can provide incredible value in terms of the return on investment, particularly due to the convenience and possibility to have an invested (yet somewhat neutral) third party to mediate between the buyer and seller in order to assess where things such as ‘lowest offer’ really stand. A solid real estate is well worth the commission, however, more and more people are starting to buy and sell their homes without using a real estate agent; using property websites that connect private sellers with private buyers.
- PROPERTY AUCTIONS
Many amateur property investors choose to head to a property auction, as they’ve heard this will be the best place to grab a deal. There are some great deals to be found at property auctions, however, there’s often a reason the property is being sold at auction; which is why it’s important to do plenty of research into understanding why the house is being sold at auction.
It could be as simple as a financial issue where the bank has foreclosed on the house and their corporate policy is to always sell at auction, or perhaps a relative has inherited the property and wishes to sell it from a distance… either of these motivations are standard, but sometimes sellers are choosing an auction for more dubious reasons.
- GO DIRECT
A better option than going to auction, particularly for newbie property developers, might be to find sellers and negotiate with them one-to-one without any middleman taking a cut; be this an auction house or an estate agent. This level of negotiation can often be trickier than outsourcing the task to a real estate agent, who is more neutral and mindful to the very personal nature of someone selling their home – but presuming you have tactful negotiation skills, finding homeowners wishing to sell their property is made particularly easy with the explosion of the internet.
So, there we have a summary of the three main routes to finding a property. What are your best strategies for finding your investment properties?
