As an investor, you are always looking for a great deal, but how can you tell? Here are 5 signs of a great deal when buying COLUMBIA real estate.
5 Signs of A Great Deal When Buying COLUMBIA Real Estate
No Zoning Issues or Liens
It is important that you research a potential investment for any zoning issues or liens on the property. If the property you are interested in doesn’t have the right zoning, you may not be able to use the property for your original plans. It is also very important that your intended property does not have any liens on it, for if you did purchase it, they would then become your responsibility to pay, and that would cut into your return on investment.
In addition to zoning issues, it is equally important to ensure that the property does not have any liens. Liens are legal claims against the property for unpaid debts, such as property taxes, contractor fees, or other financial obligations. If you purchase a property with existing liens, you become responsible for paying them off. This can significantly cut into your return on investment, as the additional costs can be substantial and unexpected.
Thoroughly researching both zoning regulations and any outstanding liens before making an offer on a foreclosure can save you from potential financial pitfalls. By ensuring the property meets zoning requirements and is free from liens, you can proceed with greater confidence and clarity, knowing that your investment is sound and aligned with your plans. This due diligence is essential for protecting your investment and maximizing its potential value.
No Expensive Repairs
If a property you are interested in does not have any serious structural issues, then it is probably worth submitting an offer, even more so if the price is right! Even if the property has a slightly outdated kitchen, you don’t have to replace it if it’s still functional or not destroyed. You don’t have to follow the TV hype of remodeling every kitchen and bathroom of every investment property you purchase. It is ok to remodel them as your budget allows, even if it takes years. You have to make sure the property is profitable first before investing any more money than absolutely necessary.
There’s often a tendency, influenced by home improvement shows, to overhaul kitchens and bathrooms immediately upon purchasing an investment property. However, it’s important to prioritize profitability and budget constraints. You don’t have to follow the trend of remodeling every aspect of the property right away. Instead, you can phase out renovations over time as your financial situation allows. This approach allows you to assess the property’s performance and cash flow before committing additional funds beyond what is essential.
By focusing on ensuring the property is initially profitable and stable, you can make informed decisions about where to allocate your renovation budget. This strategy not only protects your investment but also allows you to enhance the property’s value strategically over time. It’s essential to strike a balance between initial investment and long-term renovation plans, ensuring that each improvement contributes positively to the property’s overall profitability and appeal in the market.
Priced Near Assessed Value
If a property is priced at or below the county-assessed value, you can be sure it is a great deal! Market value is usually between 10-25% above the county assessed value. You need to be careful, because if a property is priced that far below market value, it may have some damage or some other reason why it is priced so low. You may be lucky and have a seller that is extremely motivated with a great property. On the other hand, you may have just found a bank-owned property and it might have some damage.
On occasion, properties priced below market value may be the result of a motivated seller looking for a quick sale, which can present a favorable opportunity for buyers. Conversely, bank-owned properties (foreclosures) are often priced low due to their as-is condition, which may include undisclosed damages or issues that the seller (typically a bank) is unwilling to address.
Navigating properties priced below assessed or market value requires careful consideration of both the potential benefits and risks. By conducting comprehensive research, including inspections and market comparisons, you can make an informed decision about whether the property aligns with your investment goals and risk tolerance. This approach helps ensure that you’re not only getting a good deal but also mitigating any potential pitfalls associated with the purchase.
Passes 1% Rule of Thumb
There is a general rule of thumb that real estate investors use when determining if the price of a property is a good deal. They say that the property should rent for about 1% of the purchase price. For instance, if a property should rent for about $1,400 then the ideal purchase price would be about $140,000 for it to turn a profit. In order to use this rule, you will have to analyze the fair market rental potential of the property.
Curb Appeal
If the property already has fairly decent curb appeal, then that is just the icing on the cake! That is hundreds or possibly thousands of dollars saved from potential renovation costs. You will also want to take a look at the overall silhouette of the home and make sure it looks square and healthy. Another important factor of curb appeal is a straight roofline. Sometimes when additions are made or the property withstood damage, the roofline may slope slightly, or might not match the overall composition of the house. Another thing to watch out for is different siding treatments in the home. This may also indicate an addition that lends itself to having structural issues.
If you are a real estate investor looking for a great deal when buying COLUMBIA real estate, then call Intrepid Property Solutions today at 803-670-8355. We will handle all of the legwork to look for your ideal investment property, simply provide the features you are looking for and we will provide you with some options.