It's unfortunate that many real estate investors tend to look at the bottom line when deliberating about a property, rather than the big picture. The real moneymakers in real estate investments are the people with vision, who think creatively, and are willing to assume some level of risk.
A client's initial line of questioning about an investment property goes something like this: What has the property's revenue been for the past three years? How much money will they make starting out? and, How much will they have to invest in the property in the beginning? These are all valid questions. After asking and answering them, investors might try taking off the blinders and thinking outside of the box.
Our population is growing, and land -- unlike cars, furniture, or other structures -- cannot be remade.
Real estate investors might ask themselves these simple questions:
1. Is there growth in the area where the property is located? Is there anywhere for the growth to go? If so, is it headed towards your property's location?
2. Has the city or county zoned the are for revitilization or economic development? If so, are there any special funds or benefits available?
3. Is the property accessible to public transportation?
4. Are people beginning to look for homes in this area? If so, investors want to be looking far in advance of others to secure the best property deals.
5. Is the property value in the neighborhood in a slump or an upswing? Purchase during a slump for maximum profits.
The truth is, an investor not make a profit from the property for the first two years. Investment property owners should be looking at the long-term, because they may make money over the next 15 years, while others are not.
Check County Records for Property Value
Do your research, or hire a REALTOR who is motivated to do it correctly. Speak to neighbors to understand the benefits of living there. Look at the neighborhood surrounding the area, and try to determine if those homes have increased in value. For a solid indicator, consider county property tax figures. In some areas you will find a slight increase in the tax base of 1-3%. In other areas, like Williamsburg, Virginia, taxes have increased 15-13%. Tax base increases are linked to improved property value.
Are Revitalization Funds Available?
If your investment property venture is a legitimate business, contact the local Chamber of Commerce and county government to see if there are special funds available for revitalization projects. Most Chamber of Commerces provide such programs as well as classes where investors learn how to access these funds.
There are lots of great examples of properties with potential. I'd like to share some background about one of my own listings, a motel in Williamsburg that has not been open for three years. The owners do not know when it was built ? probably in the 50s or 60s. The motel sits on 2 1/3 acres of land, which is all zoned commercially. The motel is situated right on a main thoroughfare that was once called "The Golden Mile" of Williamsburg. It's geographic location is near York County a phenomenal leader in economic development. York County is enticing businesses by zoning the northern section of town commercial and it will be the site of the new hospital complex that is currently housed in Williamsburg.
Thinking Outside the Box
An important fact is not widely known about the motel's location, which is key to its investment potential. One mile from the motel property, across from the Williamsburg Pottery, a gated senior community with full amenities (golf courses, recreation center, pool) will break ground in April 2004. The Fortune 500 Company behind the building of this project is set to build 3,000 homes, with an estimated completion date of 2006. Scanning the area, it is obvious there are no European Bakeries, international shops, or stores and eateries which deliver (drug stores, groceries, take out, etc.). A strip mall with leasing options for different businesses, or even an extended stay hotel could be built on this land, and run for a profit. Investors I have shown the property to are wary of the $1,000,000 price tag on the motel. In the coming years this price will seem like a steal for commercial property in the area.
There are many other examples of properties whose potential have not yet been discovered. Remember, once you land that investment property of your dreams, make sure you have a marketing plan, which includes a decent web site, to launch your business. When speculating, trust your creativity and vision, and rely upon the expertise of a REALTOR who knows the area, and shares your vision.
About The Author
Elaine VonCannon is a REALTOR with RE/Max Capital in Williamsburg, Virginia, and she manages investment property as part of her business. Her husband Joe is a contractor who collaborates with her on rehabilitation of properties. She has helped numerous clients invest in and make money on property investments in Southeastern Virginia. vonmor1@cox.net
First, lets start with what it is. Curb appeal is... Read More
Just like most things real estate investing can be broken... Read More
When considering investment properties, first of all, it must be... Read More
Wrapping a property is a simple concept that can create... Read More
Property Investing Secrets:How Buying Real Estate Is Like Planning a... Read More
For posting the "Truth" on your website, some FSBO's will... Read More
While most investors have got involved in property investing because... Read More
Considering the rapid rise in home prices over the past... Read More
1. Time is money when selling your homeAfter you've made... Read More
Why property, some people ask when looking for an investment.... Read More
Sometimes when we are very busy professionals and very rich... Read More
Owning investment property is a tremendous wealth building strategy. Thousands... Read More
Through our website the most common question that we receive... Read More
Do you have bad credit, no credit, filed a bankruptcy,... Read More
When painting your home for resale, choosing the right colors... Read More
The Traditional FavouritesOver the last five to ten years, UK... Read More
Don't be tempted by "We Buy Houses" or "Sell Your... Read More
In this country millions of homes are sold every year.... Read More
There are many expenses that come with buying a home.... Read More
When property investing, pay the seller their asking price but... Read More
"Begin With The End In Mind"I first heard the phrase... Read More
Is landlording the way to go if you are starting... Read More
It is increasingly common for individuals to own more than... Read More
Discover new interior Design Psychology strategies to increase your real... Read More
There are three investment vehicles which can make you rich.... Read More
You may have heard all the buzz about the newest... Read More
Specific marketing campaigns are no longer just for automobiles and... Read More
The secret disclosed on how you too could achieve financial... Read More
Homeowners who are seeking a property appraiser often ask "How... Read More
Traditionally, real estate has been viewed as a sales industry.... Read More
The conclusion of final agreement between a seller and a... Read More
A Realtor has just talked to you and said, "I... Read More
Consider the statistic in the title for a moment.8/10 millionaires... Read More
As a successful Boston real estate agent, it always puzzled... Read More
If you are thinking of selling your home, there are... Read More
In last week's article, we discussed how substantial profits could... Read More
Well, as we have discussed in previous newsletters first you... Read More
If you are in the market to purchase a home,... Read More
On October 22, 2004, President Bush signed tax legislation that... Read More
There has been a lot of talk lately about the... Read More
It can be very frustrating to put your home on... Read More
If you are considering getting involved in investment real estate,... Read More
She reached the phone on its second ring. "This is... Read More
BuyersLooking for a home-Use Internet for overview of properties, communities,... Read More
Maybe it has something to do with a childhood home... Read More
You've probably heard a lot of opposing information about Investing... Read More
Homebuyers, especially first-timers, may not think of asking about restrictive... Read More
If you want to buy a house but don't think... Read More
There is more to buying raw land than meets the... Read More
In today's tight housing market, many buyers are looking for... Read More
When it comes to home buying, the ideal situation would... Read More
Do you want to sell your home right away? Don't... Read More
Foreclosure under a mortgage requires a court ordered sale conducted... Read More
Keeping your existing house when you buy a new one... Read More
It's unfortunate that many real estate investors tend to look... Read More
European tax haven Andorra enjoys the same fiscal benefits as... Read More
A stagnant stock market, low interest rates and booming property... Read More
The conclusion of final agreement between a seller and a... Read More
The phone range and Peter was on the other end... Read More
There are three investment vehicles which can make you rich.... Read More
In our fast paced and frantic real estate market, buying... Read More
In investment real estate the quickest way to wealth is... Read More
Getting a survey before you close on any real estate... Read More
In recent years buy to let has been a popular... Read More
Cyprus is fast becoming a property hotspot for thousands of... Read More
It is increasingly common for individuals to own more than... Read More
Real Estate |