Are you looking for investment property in Philadelphia? Just because you find a property at a great price doesn’t mean it will be a great investment. Check out these tips to help you make sure you’ve found the right Philadelphia investment property!
Buying an investment property in Philadelphia is a big decision. Buying the wrong property could end up costing you your time, money, and your sanity. You don’t want to get in over your head or buy a property simply because you like it. Choosing the right investment property takes much more forethought and a clear and objective look at the property from all angles. Below, we offer a few things to consider to help you in the process of buying an investment property in Philadelphia.
Know Your Limits
Many novice investment buyers find themselves in over their head. Especially those who have made only one or two deals. These buyers will often try for something bigger and better, unaware of exactly what they are getting into. While jumping in with two feet can help you gain a lot of experience in a short amount of time, it can also be a great risk and can end up costing you when all is said and done. Don’t bite off more than you can chew. Be cognizant of what you can afford realistically and how much time you will be able to dedicate to the property. Don’t get in over your hear or think that you will be able to pull off the big deals after simply reading some books. Take your time, know what you’re doing, and learn from the right people in order to make smart real estate investment decisions.
Buy On Facts, Not Emotion
Investment property isn’t like purchasing a home for yourself. The tile doesn’t have to be your style, the shower doesn’t need a fancy head, and the lighting in the living room doesn’t have to be perfect. Many investment property buyers will get caught up in the details of a property while forgetting to look at the big picture. You don’t need to create your dream home. Your tenants will set things up the way they like anyhow. All you need to worry about is providing a safe, comfortable, and well-maintained space.
If there are upgrades that need to be made in order to increase the value of the property, these can always be done over time. You don’t have to tackle all of the projects at once. Wait for a change in occupancy or discuss with your tenant different upgrade ideas you’d like to pursue to get their two-cents. Remember, they have to live there while you are doing the work.
Understand The Numbers
The numbers will tell you if it really makes sense to buy the investment property or not. The current owner should be able to provide you with numerous financial reports for the property. A few of the reports you can ask for include a P&L report, income statement, and tenancy reporting. You’ll need to have a clear idea of the operating costs and cash flow. The more information a seller can provide you with, the better!
Work With A Partner Or Mentor
When you are new to real estate investment, it can be a great idea to work with a partner or mentor to help you avoid newbie mistakes. A mentor will be able to guide you and provide information, while a great partner will compliment your skills with skills of their own. They will help you achieve results you may not have been able to on your own. When choosing to work with a partner to buy an investment property in Philadelphia, make sure you are working with someone you like, trust, and can count on to hold up their end of the deal. You also need to make sure that you can do the same. You can always work with a partner on one deal and if it works out, work with them on more and more deals as you build your real estate portfolio.
A Way Out
Even if the property seems great now or if you can’t imagine ever finding yourself wanting to sell, it’s important to know how the process would play out if you do decide to sell your investment property in Philadelphia. Who is buying in your area? What are they paying? You don’t want to find yourself stuck with a property you no longer want, possibly missing out on a more profitable investment or opportunity. As an investor in Philadelphia, you should always have an exit plan in case you need to sell the property quickly.
Investing in Philadelphia is a great idea for any investor! However, you will only be successful if you choose the right property! The team at Philly Off-Market Deals is here to answer any questions you have about the process!