Investing in Real Estate is always an 80-40 thing. 80 percent of the time, there is no way you can make a loss. 40 percent of the time, you will make a loss. The 40 percent can almost be solely attributed to bad decisions at the time of purchase. The best thing to do is to be prudent, realistic and calculating when you make your investment.
1. Evaluate yourself. Are you a DIY person or not? This is very important to know and be realistic about. It makes a big difference when you are faced with the choice of buying a fixer upper. If you are not a DIY person avoid this prospect at all costs no matter how tempting it is.
2. Add value. Doing a few repairs, painting, adding carpets, dishwashers etc will allows you to charge higher rent for your tenants.
3. Get some perspective. This is not a house for you. This is a house that you want to sell or rent to someone else. Even if the design or the amenities don’t suit you it doesn’t matter. All you have to figure out is – Does it have an appeal to other people?
4. Pricing. Don’t get desperate and offer low rental prices. Know what the property is worth and target the right people. If it is an apartment in a busy and central part of town, your target market should be young executives who work in that city. For them, convenience is worth more than a quiet neighborhood so they will see a higher rental as justifiable.