Investing in real estate is one of the best ways to guarantee yourself a better future and become financially independent through real estate.However, when acquiring a property, you must take into account certain factors so that your investment is profitable and successful.
If you’re considering such an investment but you don’t know how to find a profitable property, here is some information that can help you find a good real estate deal.
Tips for Finding a Good Real Estate Deal
- Set goals for a successful real estate investment
- Make the right investment choice
- Analyze the real estate market
- Divide your property
- Lots or pre-sale
- Determine the best time to invest
- Tax advantages
1. Set Goals for a Successful Real Estate Investment
One of the first steps to take is to define the objective of your investment. You must therefore set the amount you wish to invest and decide what type of property you plan to acquire but also whether you are going to rent for a short, medium or long term.
Knowing whether you are acquiring the property to rent it, resell it or even divide it is very important to know how to make the right choice. Indeed, buying a house to resell it after a certain time differs from buying it to rent it out. It may be more practical for you to choose a property with the best amenities around.
Nevertheless, the rental yield can be more interesting if your property is located in a tourist region, an area close to universities or hospitals.
Mistakes to Avoid
Among the mistakes that many people make when investing in real estate is believing that real estate profitability will be immediate. Indeed, there are people who acquire real estate to rent it out and start generating income. However, when investing in real estate, you should keep in mind that the return is usually earned over the long term.
You should also know that finding a good real estate deal means that the value of the chosen property increases over time. This of course depends on the location and all the amenities that surround your property as well as their evolution over time.
For this, a good investor is one who takes advantage of opportunities when no one sees them. You can, for example, acquire a property in an area which, in the long term, will attract people who need to move away from the cities. Having such a vision will allow you to invest in a profitable property.
2. Find a Good Real Estate Deal: Make the Right Choice
Access to and connectivity to the asset are two of the elements that interact in the growth of its value over time. It’s not just about the amenities that are nearby, but also how you can access them.
A Housing for Each Profile
You buy a property near a hospital, think about the category of people who will be most interested in this advantage. The fittings of the chosen property also contribute to increasing its added value.
Indeed, the need for the inhabitants to improve their well-being and their quality of life has led real estate developers to worry about offering spaces that they can comfortably enjoy according to their needs. Gyms, swimming pools, areas for pets, parks and private security are amenities that have become more attractive for those who decide to acquire a new property. In addition, the presence of these places helps investors find a good real estate deal.
Goods with High Added Value
As already mentioned, you must set your objectives before deciding to buy. You can fall in love with a property, even though it is not located in an area that does not add value to it. This will ultimately affect your investment and its profitability. So find out and seek advice from those who have more experience in the field of real estate. And above all, don’t be afraid to ask your agent the necessary questions that will help you make the best decision based on what you are looking for. If you plan to become an expert investor, it is very important to expand your investment portfolio in order to acquire real estate in different areas.
3. Real Estate Market Analysis
You should know that you can invest in real estate even in times of crisis. Indeed, you should know that it is one of the safest investments there is. Still, you should analyze the situation to see what your best options are for finding a good real estate deal.
Finding a Good Real Estate Deal: Thinking Ahead
You must learn to look beyond the current situation in the region where you have chosen to invest in order to take advantage of a good opportunity. You can see, for example, the services that will be installed there in the long term, such as schools, hospitals, parks and parking spaces.
Thus, if a city does not seem interesting to you at a given moment, it is possible that it will become a place with high potential for real estate investment. Mayors often have city rehabilitation projects. So study the cities before missing out on a profitable purchase in a few years.
The Type of Accommodation
Market analysis will also help you think about the type of property you want to buy and what it will be used for. Take the example of a house located in an area close to schools; its acquisition will allow you to rent it or sell it more easily to a family.
Also, apartments for rent nyc financial district in an area close to the beach will give you the opportunity to rent it out during high holiday seasons. Thus, when analyzing the market, you can also decide the category of customers you want to target.
If you invest close to universities, it is very likely to have requests for student rentals.
But, there is another way to find a good real estate deal, such as creating spaces to increase your profitability.
4. The Division of your Property
Dividing a property is a technique that helps real estate investors in their search for a profitable investment. They can increase their cash flow and adapt their purchase to the needs of the tenant. However, certain rules must be observed.
An Easy Rental
With the crisis and the difficulties of access to employment, it is more and more difficult to find the right tenants or buyers for a property, especially with a large area.
For this, some investors opt for the division of their house or apartment in order to be able to rent it more easily and also obtain additional income. Some owners choose to divide their house and rent out part of it so that even if they lose space, they can guarantee themselves an additional monthly income.
Respect for the Laws
If this idea tempts you, know that you can legally divide your property in two and rent it. Nevertheless, there are several rules to take into account and procedures that you will have to follow before the rental.
In general, the regulations that frame the division of real estate are those of rule of thumb for buying a house or horizontal property law, as well as those relating to the conditions of habitability and town planning of the municipality. It is therefore necessary to obtain an administrative authorization, generally from the Town Hall, to carry out the division.
In the case of an apartment in a joint ownership, it is necessary to make sure that the division of your property does not involve damage for the other owners or a modification of the expenses of participation.
Therefore, if you want to divide your house or apartment in two so that the rental is easier and more profitable, do not hesitate to consult a professional who will be able to advise you and pave the way for you to succeed in this project.
5. Other Profitable Investments
To know the value of a rental investment, it is necessary to calculate its gross rental profitability. This is the percentage resulting from dividing the annual cost obtained by its selling price.
By dividing the sale price by the rental price, the inverse operation, you obtain the number of years it would take for the amortization of the price of your property by renting it under certain conditions. This is the best calculation for finding a good real estate deal.
Finding a Good Real Estate Deal: A Changing Market
But, it must be said that despite these indicators, the real estate market is not as stable. In addition, the investor must analyze the period during which it will be necessary to recover a certain profit, knowing that it is possible that the property will increase in value over time or, conversely, devalue.
Investors thought they were acquiring a profitable property by calculating profitability. Yet, with the changing market, their investment has become a money pit. In addition to the calculation, you must imperatively study the evolution of your purchase. You must imperatively invest in goods which appreciate in value, even if the profitability is weak rather than the reverse.
Companies, Good Tenants
For this, some investors do not choose housing and prefer to invest in commercial premises, industrial land, offices, garages and warehouses, which make other assets available to you.
Offices are often the most profitable real estate investments. This alternative is increasingly present on the market, which facilitates the exploitation of investments that are less accessible to private investors.
Additionally, businesses are tenants who typically stay in your property for many years.
But it is possible to find other investments that can pay you a lot in the long run.
6. Find a Good Real Estate Deal: Lots or Pre Sale
Some think you have to be an expert or have a lot of money to invest in real estate. Which is not the case, because you can find a good real estate deal with little and get a lot.
Invest in lots
Real estate lots, in this case, are best for you. Indeed, a lot is land that has a lower purchase cost compared to a house or an apartment; especially when it is located in an area with high potential.
Thus, if you decide to build your house there or to resell this land, you will obtain more buyer profiles thanks to the added value of your investment. It must be said that the lots are excellent acquisitions if you want to make your first real estate investment and you do not have the budget to buy a house or an apartment.
The Pre Sale
You can also choose another option to invest in real estate, which is the purchase of houses and apartments in pre-sale. This opportunity has many advantages that you should take advantage of depending on what you are looking for. One of the biggest advantages of buying pre-sale is that it gives you a better long-term return on your investment.
In fact, the prices of houses and properties increase as the construction period progresses or the neighborhood becomes popular. Thus, buying in pre-sale can be a decisive factor in making a good investment since you can buy a property that may cost you more than in other conditions.
7. The Best Time to Find a Good Real Estate Deal
Now that you have all the information you need to invest in real estate, you’re probably wondering when is the best time to buy. The answer is quite simple!
You can start your investment now. Indeed, it is very likely that you can find a good real estate deal with unbeatable prices, without forgetting that pre-sales are key if your budget is limited. In addition, the more time passes, the more difficult investing in real estate becomes.
This is due to the availability of goods, and the increase in real estate prices. Also, this area is already becoming very popular.
Find a Good Real Estate Deal: Multiply the Operations
But while using your entire budget to buy a single property might be a good idea, that’s not always the case.
To reduce the risk of having all your capital in one investment, it’s usually best to buy several smaller properties in different locations. Because while real estate is often a safe and reliable asset, there can be risks associated with currency fluctuations, political upheaval, natural disasters and even changes in local rental markets.
8. Tax Benefits for Real Estate Investments
You should know that even if the location of your investment in real estate is an important criterion for a profitable project, the tax advantages present in certain laws, such as the Denormandie law, nowadays offer you opportunities to invest successfully. in real estate and find a good real estate deal.
Indeed, this is due to the tax exemption that this law offers you. The Denormandie law, for example, allows you to benefit from as many tax advantages if you decide to invest in the old. Know that if you buy a property, which is located in the list of 222 cities designated by the ministry and you decide to renovate it, you can take advantage of a tax reduction.
In addition, you can benefit from a significant tax exemption with the Denormandie law which has been in force since January 2019. With this new system, you can have a reduction in your taxes if you decide to take charge of the necessary renovations in your property.
Nevertheless, the work you intend to carry out must represent at least 25% of the total cost of your investment, in the event of rental. In this way, you will be able to benefit from tax exemption thanks to this tax system. Check if your investment is indeed eligible for the Denormandie tax exemption if you are interested.
On the other hand, pay close attention to regions where rental demand is not very high so as not to find yourself with a property that is difficult to rent or resell.
Get started in real estate investing now by following our tips for finding a good real estate deal. Now that you know my investment techniques, I would like to know more about you. Do you have trouble finding profitable properties? Do you want to make a living from real estate? If so, I let you watch our 100% free training to help you become real estate investors.