Real Estate Part 1

Establishing real estate investing strategies is a crucial part of investment plans. In order to succeed in this ever-changing market, investors must carefully research each type of strategy to determine which fits their needs and financial budget.

Numerous real estate investing strategies exist. A good way to reduce time spent investigating each strategy is to network with other investors. This can be accomplished by joining local real estate clubs or participating in online networking forums. The most common strategy is investing in residential properties. What's nice about this niche is the number of ways to generate profits. Prior to the banking crisis, investors often engaged in house flipping which involved buying distressed properties at reduced rates, making repairs, and quickly selling the house for profit.

Today, many real estate investors are buying residential properties for use as rental homes. Others are combining 'owner will carry' financing to sell properties to buyers who do not qualify for bank financing. This investing strategy allows investors to obtain fair market value for the house while creating positive cash flow.

Owner will carry agreements include: seller carry back trust deeds, rent-to-own, and lease purchase option agreements. Buyers provide a down payment with their purchase contract and remit monthly payments toward the purchase price. Owner-financing contracts extend for 1 to 5 years while buyers restore their credit. Once the contract ends, buyers refinance through a bank or credit union.

Residential homes can also be used as short-term rentals. This can encompass renting the home to business travellers or as vacation property. When investing in homes for short-term rentals, investors must be financially prepared to fully furnish the home and engage in cleaning after each rental.

The best time of the year to sell a house is the spring. Buyers come out of the woodwork during the spring, and with tax refund checks in the bank, spring buyers more often pay full price. In fact, sales peak in the spring, helping to explain why about 60% of those who move do so in the summer. Tip within a tip: Don’t price your house with a zero at the end. Studies show that people perceive a precise price, such as $282,284, as lower than rounded ones, such as $280,000, even when the rounded prices are actually lower. Real-life sales show that one zero at the end of an asking price lowers the final sale price by .72% and two zeros lower it by .73%. That may not sound like much, but it can add up to thousands of dollars.

The best day of the week to list your house for sale is Thursday. This is true during a seller’s market, but if you list your house for sale on a Thursday, it will be available right away for weekend showings and by Saturday — the most important day of the real-estate week — your house will have shown only two days. That’s important because the fewer days on market, the better chance the home will attract a full-price offer. Even if your house doesn’t sell by the next Saturday, it will still show only nine days on market, benefiting from the psychological advantage of a single-digit number.