There is an old saying in real estate that has been around for decades: “Buy land! They’re not making it anymore!” Well, many folks reading this article can probably relate to “missed opportunities” like real estate deals that never materialized or recalling what a family member said about stock market investment that was never jumped on.
All that said, here is a short primer on things you need to know when making an investment on retail property like a business and what is required when buying a home to rent out, so you won’t regret it five years from now.
First, let’s talk about residential real estate investments. According to Than Merrill, CEO of the real estate investment/education company Fortunebuilders, “Real estate investing is a wonderful asset as an investor. (It) offers a magnitude of strategies for those with insufficient retirement savings, including the ability to provide future retirees with short and long-term advantages, whether approaching retirement age, behind on savings or looking to retire early.”
There is a process you need to follow if you want your future home search and purchase to go smoothly, and here’s a few tips:
Common Sense Real Estate Investment Advice
- If you can’t pay cash, arrange your financing first so you will know what you can afford. Then get loan approval from a lender.
- Real estate agents/brokers can be helpful, but be selective on who you hire. Some are better than others and make sure they are state licensed.
- Make sure you have a complete inspection on the home by a professional inspector.
- Make a “fair” offer on the property regardless of what the agent or current homeowner says.
How To Buy A Retail Business Investment
- Have a business plan that is thorough and ready to go way before you buy.
- Never purchase any type of retail business that’s away from where the “action is” unless the investment is of the “industrial” type.
- Don’t locate your business investment within a mile of any strong competitor.
How To Buy A Rental Investment
A rental investment could be a condo, apartment, four units, or a new manufactured home in a rental park for seniors.
- Once again, if you can’t pay cash, get pre-approved from your bank or other lender. If you have to borrow all the funds and have a credit history that is at or below the 650 mark, you may want to rethink your investment goals.
- Make sure the location is in a “rental area” and not out by an airport or bad part of town. Verify what units are renting for.
- Read up on rental investment tips from professionals and keep learning!