Selling and Buying Properties - Your Checklist To The Procedures
By Derek Rogers
The idea of buying and selling properties seems daunting to many. Some will simply decide that it s too much work and too much risk. Inevitably, they will decide not to do it because they are not confident that they will get a good enough return on their investment. Yet, a simple list of things to do before investing in a property can be the difference between a monetary loss and gain. Using a checklist will ensure that you, as the investor, have covered all of your bases and leave you with the confidence that you need to realize that you have made a wise decision and your investments will never fall short of a profit.
1. Have you done your homework?
When you see a property that you believe may yield a profit, find out why it s for sale. Many people sell when they are ready to upgrade or downgrade. In these cases, for the most part, the property is likely to have been pretty well cared for. On the whole any repairs are more likely to be minor.
On the other hand, if the house is being sold to avoid foreclosure or if the house is already in foreclosure, you are more likely to have bigger problems. This usually happens to a property only after the mortgage is behind by several months even up to six months in some cases. What this means to the property is that any repairs that it has already needed have been neglected. When problems are neglected in the beginning stages, they become bigger problems later. This is not to say that you cannot invest in foreclosed properties, but you should be very careful before you make any commitments.
2. Will you still turn a profit once all repairs have been made?
This seems an obvious question, yet investors sometimes overlook the true cost of repairs. When you make the offer of what you re willing to pay for the property, do not forget that a property in the most pristine condition will still need some cleaning and possible painting to get it ready for sale. When making your offer, be sure to hold back enough to pay for repairs or cleaning.
3. Find out how other properties in the area have been selling.
Take a drive around the area and look for “For Sale” signs. If there s a lot of them, take it as a sign that there will be a lot of competition and maybe another area will be better to suit your needs. Better to be the only “For Sale” on the block in a desirable area than to be among a sea of signs with little hope for a quick profit.
4. Remember, time is money.
No matter how much work a property will need, be sure to accomplish it quickly. If it s going to take six months to get a property into condition to sell, that s six months worth of taxes and interest you will be paying unless you have bought the property for cash. In addition, that s six months of electric and sewer as well as insurance.
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For any investor, profit versus loss is the bottom line. Following the listed checkpoints will insure that you will constantly turn a profit no matter what kind of property you have invested in. All types of properties can turn profits, even foreclosures, if handled properly.
Derek Rogers is a freelance writer who represents a number of UK businesses. When it comes to buying below market value property, he recommends Newcastle Residential Investments
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