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We all know that one of the most reliable ways to make money, long-term, is to invest in property as the risk to reward ratio is so good.
The challenge, however when it comes to property investment is that you do require the finances to be in place in order to get your foot on the ladder. Now, whilst the credit crunch has made it much more challenging for many people to obtain finance, the good thing about property investment is that the financial institution, such as a bank, will tend to lend money with the house as collateral – meaning you’re might be more likely to get a commercial mortgage than you might expect.
However, before you get bogged down in the world of property finance, you’ll need to find the ideal investment property for you and there are essentially three basic ways to do that.
FIND A REAL ESTATE AGENT
The most conventional way, of course, is to find a good real estate agent. These guys can provide great value in terms of the return on investment due to the convenience they offer, yet there service really does come at a cost to both buyer and seller.
A solid real estate agent is well worth the commission, yet more and more people today are starting to buy and sell their homes using property websites that connect private sellers with private buyers.
There are some deals to be found at property auctions, however, it’s worth being mindful of that fact there tends to be a reason the property is being sold at auction rather than using the conventional channel of estate agents.
Now, that reason could be as simple as someone wanting a quick sale, or perhaps a financial issue where the bank has taken the house and their policy is to always sell at auction. The point is, there are legitimate reasons a house might be sold at auction, but it’s important to do plenty of research into understanding why the house is being sold in this way, as sometimes sellers choose an auction for more dubious reasons, as prospective buyers don’t get the chance to do all the property inspection checks they might otherwise do.
More and more property developers are finding sellers directly, and negotiating with them one-on-one without any middleman adding tons of fees in the process – whether this middleman is an auction house or estate agent.
Of course, this level of negotiation can be trickier than outsourcing the task to a real estate agent, but presuming you are mindful and use tactful negotiation skills, finding homeowners wishing to sell their property is now made easy with the internet.
Whether you decide to go with an estate agent, buy at auction, or negotiate directly with the seller, it’s important to undertake due diligence, just like how a venture capitalist will undertake due diligence when assessing a potential deal with a start-up. This is particularly pertinent if you decide to go down the auction route.