Last blog we talked about personal motivations for buying a home, is it because you want a piece of land and a place to call your own (and I do believe that is part of human nature), or completely monetary- you want to buy real estate to make money.
For many of us, the motivation is a blend of the two. It was for me. Growing up, my family moved several times- sometimes because of a change in my dad’s career, other times because my mom has a natural instinct when it comes to real estate and was able to make money on homes by buying them, fixing them up and selling them.
Here are some highlights of her wisdom.
Finding the right home is one of the most important parts of hoping to make money on real estate.
Ideally the home will have these qualities:
Lack curb appeal: Homes that are cosmetically very appealing tend to sell faster and for more money. This is part of the fix and flip strategy. Purchasing a home with bad paint jobs or ugly interiors tend to sell for less. Once you buy it, you can fix it yourself!
Be valued less than the other homes in its neighborhood: An important part of home value is its location. That’s an understatement. Location, location, location. If the home is valued less than the others in the area, its a great opportunity to make improvements that will attract sellers and increase its value when you sell. A home that is already the most valuable in the area may be close to maxing out its potential.
Be purchased at a price lower than its current market value: Ideally, you would be able to buy when the market is down, and sell when things are improving. Most of us will have little control over when we sell, but if you are able to wait and choose the right time, do it. Other things that can cause a home to be sold lower than its current market value are the particular motivations of the seller- if they need to sell quickly, for example.
Be in a “valuable” neighborhood: There are probably many different opinions on this topic, and please remember this is just my opinion based on what I’ve seen. I was looking for a stable community (other homes were well maintained and few were for sale), that was in a good school district. There are many, many things that affect the value of particular neighborhoods, so this is just an example.