Aside from being the Fresh Places team leader, Justin is an established realtor and investor! Over the years he's acquired over 12 investment properties with 40 total units. It all began with an apartment he was renting with some friends fresh out of college. He ended up buying the building from his landlord at the time. This worked out great - he already had tenants in place, and was able to live with friends while their rent paid for the mortgage on his first home. One thing led to another and his portfolio kept growing. The purpose of this post is to share some of what Justin has learned throughout his investor journey - so if you’re thinking about investing in real estate for the first time, here are a few things to keep in mind!
Benefits of Off-Market Properties
Buying an off-market property can offer advantages as far as price, terms, and lack of competition. A good way to find off-market properties is by simply sending out letters in your target area to let people know that you’re interested in buying their home. This is a hit-or-miss approach, but it can’t hurt to cast a wide net and see what happens! If somebody is seriously open to the idea of selling and they decide to get in touch with you, great. If not, that’s fine too. Once you get your foot in the door with a potential seller, as long as you have good intentions and they can sense your sincerity, you could have a solid chance of getting the sale.
Location is Key
Remember that you’re investing in the neighborhood along with the property itself. Buy in a neighborhood that you’d want to live in yourself, but also where tenants could cover your mortgage. Prioritize long-term appreciation over the best immediate return.
Good Tenants Are Important
Finding reliable, trustworthy tenants is key, even if that means you’ll be charging a slightly lower monthly rent. Sometimes, finding the right tenants can’t be rushed. It’s okay to let your property sit vacant for a month while waiting to find the right people! Aside from finding tenants who meet your basic criteria (proof of income, a good credit score, etc) make sure to follow your gut instinct on who seems like a good fit.
A few more things to consider:
- Buying your first property as a primary residence is ideal.
- Get the best long term rates possible.
- Know (or have an idea of) who your tenants will be before buying.
- Always consider the worst case scenario. Don’t buy a property where you couldn’t resell and break even if it came down to it.
- Keep in mind: the cost of renovations is out of your control, but you do have control over the price you pay for the property.
We know that any real estate purchase can be overwhelming, whether it’s your first home or your first investment property. We love guiding our clients through the buying process, ensuring that their goals are met while making the transaction as smooth as possible. If we can help you reach your real estate goals or answer any questions, feel free to reach out today!