Ten Questions to ask before Investing in Real Estate

 Ten Questions to ask before Investing in Real Estate

Real estate investing is popular and with the right knowledge, the result can be rewarding.

Let’s discuss at least ten questions to ask before investing in real estate.

  • Where will the money come from?

There are several places to acquire money. It can come from traditional places, such as a bank. Nontraditional, a private money lender. Some cases using money from a self-directed IRA.

  • Why should someone invest?

The possibility of opening doors to financial freedom is endless. Provides opportunity to increase values in the local hometown. Being a part of bringing an old or neglected home back to life is very rewarding.

  • How important is location for an investor?

Just like a retail store or restaurant, location is everything. How close to schools, shopping and restaurants? Consider how quickly other homes in the area are selling.

  • What sources are there regarding the market?

One of the best sources is to reach out to other investors and local real estate agents. Many times, there is information on houses sold in a specific neighborhood on the Internet.

  • If a rehab is needed, how long should it take?

From the time of purchase, keys in hand, a typical rehab should take 30 to 90 days. The quicker the investor can put the house on the market, the better for a ROI (return on investment).

  • To sell or to rent?

Better yet, the question is, do you want to keep the goose that lays a monthly golden egg, or are you looking to just get the golden egg one time? If keeping the property, there is a profit to be made each month for as long as you have ownership. Selling it outright, is a one-time payday, but at a larger amount. With that money is available immediately to purchase another investment.

  • Is a realtor required when purchasing or selling a real estate investment?

The traditional answer is yes, but ultimately, it’s the investors decision. A realtor can get the property sold quicker, they have more advertising eyes out in the market. A real estate investor can sell the home on their own, though it can take a little longer. Keep in mind no commissions will need to be paid out in the end. When using a realtor, remember, commissions can be negotiated.

  • What forms of city government are helpful sources that can be utilized?

There are at least two branches in the city, become familiar with them. The city building inspector and the housing authority. The city building inspector has the unruly task of making sure all the building codes are being followed when doing a remodel. The housing authority is the department that can assist when and if the investor makes the decision to rent the property. They also inspect the property if the renters have governmental assistance to pay rent.

  • Where does an investor find property?

Friends and family are an excellent source to have. They are additional eyes and ears. Driving around a neighborhood. Seeing how a property looks outside, taking notes on how the lawn looks and exterior paint are good clues that an investment is to be had. Real estate agents themselves can be helpful too. When contacting an agent, be sure they know the price range, location and any guidelines there are.

  • Lastly, why become a real estate investor?

Is it to become financially free, pay off debts or even to start a nest egg for retirement? Knowing the why is important, because there is an end goal to be met. Becoming a real estate investor requires time, patience and be willing to take risks.


Dana Heald