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When buying an investment property, determine what you look for.
Quick profits like a developer, an income stream, or the
accumulating of wealth eventually? Your strategy in each case
varies.
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Understand what is going on in the property sector when
purchasing an investment property. Find out about buying investment
real estate by reading books, magazines, following multimedia on the
topic, reading your local paper, walking or driving around seeing
properties and by speaking with realtors as well as some other
investors.
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Do not be impatient. You simply need a few great deals over the
years to generate a fortune.
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Be sure you are able to respond to important questions for
example: is it a great time to purchase property? Are property
prices increasing, dropping or at a standstill? For how long have
they been like that? In case the market is reigned over by
short-term traders and costs are high then do not buy -- unless it
is a definite steal which you can get a quick gain by selling the
investment property. Long-term buyers need to avoid the market over
these conditions.
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Presuming the time is appropriate; think about the specific
location of a property. What is the area like? Is the property
located at where the excitement is?
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Have you done your calculations when buying an investment rental
property? Will the rental revenue at least meet the costs including
interest rate? In the event the numbers do not stack up, avoid the
deal.
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What could be the impact when rates of interest increased 1, 2,
3, 4 percent or even doubled? Do you know the probabilities that
rates of interest will increase?
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For purpose of financing an investment property, are investment
loans obtainable?
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Is the condition of the building in a poor state of repair? If
that's the case, include the expense of repairs to the actual cost
when doing your calculations.
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How safe is the tenant? When the tenant quit what would be your
likelihood of getting an alternative quickly?
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How serious would your situation be in the event the tenant went
broke and the property was vacant for 3, 6, 12, or 24 months?
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Are properties in the immediate location being redeveloped or is
there an opportunity that the place will probably be re-zoned? Do
you know the developments in the immediate property market?
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Do you really feel secure regarding the deal? There are millions
of properties available. You are surely in the driving seat as you
have the cash. Spend it which means you lose your position of
strength. Be selective.