So you’re considering taking the leap and purchasing a Raleigh investment property.
That’s great news!
Unlike other types of investments, real estate has innumerable advantages. And it is for this reason that income property is often an attractive option for investors, especially whenever the housing market turns around.
As a property investor in Raleigh, you have the chance to not only receive a positive cash flow and create equity, but you’re also able to shield your profits from taxation.
Unfortunately, there are equally as many ways to lose your hard-earned cash. As such, having your homework done beforehand is necessary.
So before you go ahead and buy a Raleigh investment property, it is important to learn everything there is about real estate investing.
Remember, the key is to understand the different investment strategies as much as possible before you dive in.
Below are 7 Tips for Purchasing Investment Property in Raleigh
1. Carry Out an On-Site Property Survey
In order to make your investment work for you, it is recommended that you conduct a property survey to establish the possible return you can expect to yield.
For this purpose, you need to look at the various neighborhood properties and try your best to learn as much as you can.
First, you need to establish whether or not the demand exists by looking at the occupancy rates.
Secondly, you’ll need to know how much the property can rent for.
2. Consider the Metrics
Once you have found an interesting Raleigh investment property, it’s important to understand whether or not it has wealth creation potential or not.
For this reason, consider metrics such as the population demographics and growth, historical growth trends, employment rates, and vacancy rates.
Next, look at the employment situation in the area. Are there any new jobs being created in the neighborhood? Is there any downsizing?
Predict the type of people likely to be searching for a home in the community – retirees, families, young families – and make the appropriate property investment decisions.
3. Inspect the Property
Check for any red flags. Before making an investment, it pays to be thorough. A few simple maintenance checks can sometimes make the difference between stepping into a costly nightmare and buying your dream property.
We recommend hiring a qualified building inspector’s services. But if for whatever reason you’re unable to, we recommend you to check;
-The basement floor for any flooding after rain
-Whether the local building codes have been followed in setting up the electrical system
-If the plumbing is up to par
-If the roof is in good condition
-The walls for large cracks
-The ceilings are not sagging
-The external roof lines
-Whether there’re drain holes on the external perimeter walls of the property.
4. Make Proper Cash Flow Judgment
When purchasing an investment property, investors need to take all the necessary renovation costs, repairs, and maintenance into consideration. Furthermore, you need to allocate more than just the estimates in case the costs run over.
We highly recommend hiring the services of a professional property manager for your Raleigh investment property. But before even considering it, you need to factor in the property management fees in order to avoid any surprises later.
5. Assemble a Team
Keen investors always surround themselves with a qualified team of professionals to support their investments. Search for a real estate agent who is well versed with Raleigh investment property, a qualified real estate attorney, an honest property evaluation appraiser, and a trusted lender who can be counted on to provide financing.
Since buying a property means you’ll have to do routine repairs and maintenance, and possibly remodeling, add an HVAC contractor, painter, plumber, an electrician and others to your team. To simplify things even further, you can enlist a property management company’s services.
6. Come Up With an Exit Plan
Making an investment is just one part of the equation. The other part is planning your exit strategy. This will be fundamental to helping you purchase your next property.
For example, you might want to buy a property in need of repair and then sell it for a profit later on. Or hold onto a property expecting prices to go up. Make sure you assess your options before purchasing.
7. Understand Your Alternatives
If for some reasons your exit strategy fails to bear the results you had envisioned, then you might want to consider some other options.
Albeit at a cost below market, you might want to offer a buyer a lease-purchase deal or have your property sold to another investor through the wholesale option.
Purchasing real estate requires due diligence. But if you put in the proper research, dot your I’s and cross your T’s, you’ll be sure to find a Raleigh investment property that can yield a great return on investment.