How To Find A Profitable Investment Property
In an ideal world, we would have at hand all the information we need to make an effective investment decision in real estate, but unfortunately, that world does not exist so there is no other way than to go out and look for it, but how much information do I need? the answer is as much as possible.
However, there is a real estate investment rule that can help you find that profitable investment property, it is called the 100:10:3:1 rule, which tells us that if you see 100 properties, you offer on 10, and try to settle a deal on 3, you might end up buying 1, let me explain this sequence in a little more detail:
Below are the various ways:
- Choose the place where you want to buy, with this we attack the “location” element.
- Choose the type of property, that is, if you are going to buy an apartment, house, building, land, commercial premises, etc.
- Decide what is the price range in which you want to move.
- Look for properties with the characteristics that you have already defined in newspapers, specialized magazines, Internet portals, with friends, real estate agents, and even in your bank.
- List the properties that most attract your attention, you will soon begin to realize that in the same area there are similar properties at very different prices. You can expand this search to the number you want, but the rule tells us that at least up to 100 if you want good results.
- With the information collected from each property, you must order your list, a good way to do it is based on two criteria, the price per square meter and a rating that you give to each property based on its general characteristics.
- Next, visit the 10 best properties according to your already ordered list, if possible do it in the company of an expert to have a better idea of the real value of each property, as well as the repairs or remodeling that it would need.
- Make an offer for those with the greatest potential, I recommend that in your offer you seek to pay only 60% of the market value of the property, do not worry about offering less than what the seller asks because I assure you that there will be someone to accept your offer, in fact, the statistics say that 3 of the 10 who receive the offer end up accepting it.
- The next thing is to choose the best property among the 3 that accepted the offer and that’s it! there you have a winning deal.
Clearly, there are a number of items on this list that require some sort of thought ahead, such as how to choose the optimal location, property type, or price range, but those are things we’ll get into later, for now, what we are interested in is seeing you understand the basic methodology for finding a profitable investment property.
Perhaps at this moment you are thinking that this is a lot of work so that no business can possibly end up being done, and my answer is… maybe yes or maybe no, this depends on if you are really looking to become a real estate investor, but don’t worry!, there are procedures and tools that I will explain later that will help you with all these issues.
If you have any questions or comments feel free to message us and we will be sure to provide answers to your questions as soon as possible. I hope you liked this article and that you learned something new, and if so, please help me share it. Thank you very much!