Being a Real Estate Investor, you usually tend to go for higher valued properties thinking it would constantly bring you good returns on investment. This is not entirely true because cheap properties also have the potential to turn your investments into big profits. You can afford to buy the cheap rental properties and earn a decent 20-25% ROI. Here are the 4 best ways which you can implement to take advantage of cheap real estate.
Go For $30k Rental Property
Start with buying a $30k rental housing property and makes sure all the amenities are available and the house is clean before renting it out. The maintenance includes keeping the roof in good condition and setting up the HVAC, plumbing and electrical systems to function perfectly. Put in the money on all the basic things that is either broken or needs to be renovated. If you take care of these small things and spend your dime in the right areas, it will make up for a pretty decent house.
Do Your Research
You may not be sure about the area surrounding your property and may want to check first before closing the deal. Although cheap properties are associated with troubled neighbourhoods like criminals and gang activity and people living on low incomes, you can do the homework and talk to people in these areas and get a fair idea about what suits your reference. You will meet people who do take good care of their property and are good people too. In short, if you put in some effort to understand the demographics of the people who reside there, it will help you take better decisions.
Stay In Touch With The Tenants
A good tenant will always help you profit in the long run. Speak to them on a regular basis and ask for the issues in the house as things usually tend to break down sometimes. There is no fault in asking for problems in the house and receiving calls from the tenants is good because you want to stay updated on these issues. Keeping on the promise that you made while renting the house will make you a better real estate investor and flip more cheap properties.
Lease Options
When you are finding cheap properties, look for the property that comes on a lease. You won’t have to invest much capital and you will always have the option to buy the property at the end of the lease. So if there is climb in the property market rates, you can purchase the leased property at a discount. Even if you don’t want to buy the property, you can make it profitable by selling the lease rights to someone else who is willing to purchase that property.