So what is a good deal and how do you know when to get one? This is a question with a multi-faceted answer and were going to try and look at every facet so that you can get that perfect deal. When you look at a property, the first thing you need to look at is the condition the property in its present state. If its good condition and needs very little refurbishing, then maybe its a good idea to go in for a deal. However, in many a case, especially where old houses are concerned, the properties may require a lot of investment so that the property may look good. In such a case, you need to consider the cost of the repairs and any other expenses you might have to bear. If these turn out to be much more than the cost at which youre buying the house, it obviously makes no sense in investing in that piece of property. However, if the expenses arent way over head and can easily be dealt with, and you know for sure that your selling price will easily cover your buying price and the expenses, then maybe you should go ahead and buy that property.
Once youve had a good look at the property, you need to consider the purchase price of it. Of course before you go looking for properties to buy, you need to have a fair idea of the market value of different properties. You need to make sure that the purchase price of the property is in keeping with the market value of the house. You need to conduct a good market survey for this, and understand exactly what is in demand and why.
Once youve solved this, you need to consider the cash flow from the property and the profit youll make off it. If you decide to sell off the property, you must make sure that the selling price is good enough for you to make a profit from the whole deal. However, if youre renting out the property, you must ensure that you charge a fair rent. You should not cheat your tenants, yet at the same time, make sure its profitable for you.
Of course apart from all these prime factors, you also need to keep in mind the risk factors involved in you purchasing the property. A favorable combination of these factors should get you a great deal from any property you invest in. But it could easily boomerang on you, the real estate deal, and you end up having to pay for it from your pockets. Of course, at the end of the day, you have to keep one thing in mind; the residual income generated through real estate should be good. Once youve considered this factor, that the property has a reasonably good earning power- that by itself should seal the deal!
