The Irreverent Guide to Buying Rentals 1

The Irreverent Guide to Buying Rentals

Foreclosures

The first thing you have to do if you’re planning to own a rental is buy it. Duh! Of course, like when you purchase a house to flip, you want to pick up the best bang for the buck. One big difference is a flip is short term and a rental is usually long term. In other words, a flip is for less than a year, a rental is for a year or more.

If you’re a new investor, you’re probably looking to buy some type of residential housing. So, how can you get a good deal? One good source of finding a property is an EXPERIENCED real estate agent. Tell him/her what you’re looking for and how much you can afford. Remember; don’t drain your bank account to buy your rental. You’ll need extra cash for the inevitable repairs that need to make.

In the next few hubs, we’re going to look at purchasing foreclosures, seizures and tax auctions. Foreclosures are properties that come up for sale because someone didn’t make his or her mortgage/trust deed payments. A seizure happens when the Feds get involved, usually because somebody doesn’t pay taxes or commits a crime. (Note: A not so nice aspect of the law also allows property to be seized under imminent domain. That simply means that if your community or government thinks your property can be put to use for a greater good than to house a peon like you, they can seize it. Oops, sorry. I’m starting to rant.) A tax auction happens when someone doesn’t pay his or her property taxes (I’m feeling another rant coming on.). Owner’s can also lose their property for not paying their annual ULID (utility local improvement district) charges.

Let’s start this discussion with foreclosures. Sometimes buying into someone else’s misfortune can make money and sometimes it can’t. The best time to buy a distressed property is before it goes to auction. This can create a winning scenario for both you and the property owner.

If you go to http://www.foreclosures.com/www/pages/alexis/ , you will find information on foreclosures for every state plus a ton of reliable information. You can access information about your state foreclosure practices free and without signing up for their newsletter. If you want to access previous newsletter topics, and there are many, you have to subscribe to the free newsletter. They also allow you to search properties in your county free, but to get a detailed report you must be a paid subscriber. Alexis, the foreclosure guru, real estate agent, author and Co-Founder and President of the site writes so anyone can understand what she’s saying. I like that in a writer.

No matter how overzealous you are, one thing that’s important to remember is to carefully consider your actual costs when you invest in a foreclosure or, for that matter, real estate of any kind. Those costs will vary depending on how long you hold the property, property taxes, insurance, repairs, etc. etc. etc. etc.. Alexis has an excel spreadsheet she uses to help with this, but you have to pay for it.

Now we’re in the process of acquiring rental property. However, the same rules hold regardless of weather you’re buying the investment to rent or flip.

Next time I’m going to throw some really boring terms at you that are important to know if you plan to invest money into real estate. We’ll also take a peek at seized property auctions.

To see previous hubs relating to this subject go to:

http://hubpages.com/hub/The_Irreverent_Guide_to_Rental_Property_Investments_The_types