Florida Realtors, a group known for closely monitoring local real estate trends, reports the state’s closed sales for single family homes increased by more than 10% from 2020 through 2021 and condos and townhomes went up almost 20% during the same time period. Those looking to purchase real estate as investment property are wise to do some due diligence. This will help reduce the risk of an agent taking advantage of you in the current seller’s market.
Some tips that can help to better ensure your foray into real estate investment goes well include:
Tip #1: Find a property that can make money in more than one way
The two main money makers for investment property are appreciation and rental income. Unless you have other plans for the property, it is generally not a good idea to invest in a home in a neighborhood that does not allow rentals. A common example that leads to this hurdle are homeowners’ association (HOA) rules. If a target property is in an HOA get a copy of the rules and review them carefully before moving forward.
Also, look for a home that has potential for future growth. It is often best to avoid a home that is overpriced or the most expensive in the neighborhood because the odds of appreciation are lower.
Tip #2: Stick with the usual
A unique property rarely pays off. Star Wars theme? Unless you are in Orlando this may be a bad deal. Even then it could exclude those who are more interested in Mickey and his crew or princesses.
Tip #3: Get, and keep, a budget
Set a budget to purchase property and include some wiggle room for unexpected costs like the need for a new roof, pool work, or pest control.
It is also a good idea to reduce the risk of surprises at closing by having a real estate attorney review the paperwork. This professional can advocate for your interests and better ensure the transfer goes smoothly.