How To Find The Best Las Sendas Realtor In Arizona, there are plenty of high end communities with lavish homes and gorgeous surrounding scenery. But luxurious home buying is no mean feat. When you are…
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5 Common Mistakes Beginner Arizona Home Investors Make
Real estate is a great investment, whether you are buying a home to live in and keep in your family or you are buying a house to rent or to flip. There are great opportunities throughout the Phoenix Valley area, from East Mesa to Scottsdale. But in order to find the right investment homes, you need to do your research and work closely with an experienced realtor who knows the area and can help you identify up-and-coming opportunities.
Understanding the common pitfalls can also help you avoid some investing disasters and get on your way to profitability faster. Here are five common mistakes that beginner Arizona home investors make – so you don’t make them:
Getting Bad Financing
Unless you have a fat trust fund from which to draw to pay for houses in cash, you’re likely going to have to finance your purchase. The financing terms have a big impact on your profit, whether you’re selling a house in three months or in 30 years.
The higher the interest rate on your loan, the more you will pay and the longer it will take you to build equity. An adjustable rate mortgage might seem like a good choice since it lets you start with a very low interest rate, but it will almost certainly balloon to a steep interest rate that you either cannot afford or that will eat away any profits you had the chance to make. You may think that you’ll sell the house before the ARM resets, but that’s a gamble that can make you lose big if you’re wrong.
Get the best loan terms that you can when buying your house, including a low, fixed interest rate. Your monthly payment should be affordable even if you can’t rent out or sell the house.
Shortening the Due Diligence Period
The due diligence period gives you the chance to have the house thoroughly checked out and to cancel the transaction if you discover anything that can’t easily be resolved. A lot of investors prefer a fast closing process so that they can negotiate a better deal and get on the way with repairs. However, this locks them into a property that may have huge, costly problems that they didn’t foresee.
You can shorten the due diligence period while still giving yourself time to have the house checked out. Get third parties to perform an inspection, provide estimates for repairs, and give you an opinion about the resale value or a rent estimate. You’ll have a much better idea of what you can expect for your investment, and you can still close in a reasonable amount of time.
Going It Alone
Once people have a real estate investment or two under their belts, they may get overly confident and think that they know how to do it all themselves. But if you are going to make the right investment, you need to work with the right team of professionals who can counsel you.
You need a good team of contractors, such as a plumber, electrician, roofer, painter and so on. You need a good closing attorney, inspector, appraiser, and – of course – a good realtor. All these people can help you evaluate the property and move quickly.
Under or Overestimating Value
There is no big flag on an investment home telling you exactly how much it will sell for later or how much rent you will get for it. A lot of it is determined through research and experience, and part of it is just intuition. It can be easy to get it wrong.
If you overestimate the value of a property, you can lose thousands of dollars in the resale. If you underestimate the value of the repairs, you’ll end up spending much more on getting the property ready and will reap smaller profits. Conversely, if you underestimate the value of a property, you may pass on it and miss out on a big resale.
Being Guided by Emotion
The prospect of buying a house and flipping it for a lot of money is very exciting, and it can make people a little too eager to move forward on a house that may not be worth it. Don’t let yourself be swayed by emotion when considering a home in Las Sendas – whether it’s the excitement at the prospects, nostalgia because of what the house reminds you of, or even fear because of all the work it needs. Do your research and work with the right team to determine the right buy for your goals.
Investing in property can help you grow your wealth if you make the right choices. Avoid these mistakes when considering investment homes and you’ll already be off to the right start.
Then call a realtor from Coldwell Banker North East Mesa to start your search for investment homes. We represent some of the hottest properties in Mesa, including top communities like Las Sendas in East Mesa. Our realtors have years of experience and successful sales in the area, so we can help you identify the right opportunities. Call us today to get started on your search in Las Sendas or elsewhere in East Mesa and beyond.
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