4 Ways to Stay Ahead of Other Buyers When Buying Investment Real Estate in San Diego
Real estate investing is an attractive choice for many because property values appreciate over time. Unfortunately, new investors often underestimate the reality of owning investment property – fielding calls from tenants and dealing with day-to-day tasks can be stressful!
Therefore, when purchasing investment real estate in San Diego, it’s essential to stay ahead of other buyers by taking steps to gain an edge. Here are some helpful hints:
1. Research the Market
An essential aspect of real estate investment success is understanding your local market, including its trends and history. Knowing these details will enable you to select neighborhoods best suited for achieving your investment goals.
At a minimum, this process will provide the information necessary to assess current and expected future performance of an area’s property prices and rental rates. This information is essential since real estate investments differ significantly from stocks in that they depend on many outside factors that could ultimately dictate performance – as opposed to publicly traded stocks that can be traded directly on an exchange.
As an example, local laws and regulations will determine whether you can rent out your property. Landlord-tenant relationships are intricate affairs, with some states having laws restricting how much rent can be charged per month. Furthermore, changing cultural norms or demographic cohorts can alter neighborhood demand and property value changes accordingly.
Experienced investors spend considerable time and energy assessing the viability of any location they select for investment purposes. This may involve researching zoning ordinances that limit building heights or features that make their property less desirable to tenants or buyers; additionally, one should evaluate safety issues that might impact its neighborhood such as vandalism or theft.
Make the time to visit a community yourself and gain a first-hand impression of its inner workings, including its commuter routes and home maintenance standards. Check the registry of deeds to gain more insight into its current owner and mortgage payments as well as any liens against it.
2. Make an Offer
Experienced or novice, making a strong offer is key to real estate investment success. Submit it as soon as possible so you have a greater chance of winning the bidding war where another buyer offers higher prices than you. A real estate professional may help determine an optimum offer price and bid amount so as to prevent this scenario from happening.
Demand and prices for investment property have both seen steady increases. This trend may be tied to an economic expansion as hourly wages have grown faster than the national average and unemployment is at its lowest levels, thereby driving up demand for housing investments.
Supply is limited, particularly for single-family homes. Furthermore, new laws such as AB 1482, AB 3088 and SB 91 have come into force that could have an effect on prices; as a result it’s vitally important to hire an agent familiar with such laws who can guide you through the process and help find you an affordable investment property; they can even negotiate terms of sale!
3. Negotiate the Offer
No matter if it’s for televisions, hotel rooms, or life-changing investments like real estate – when it comes to finding the best deal possible it is always essential that negotiation be part of any successful purchase. Unfortunately many real estate investors lack strong negotiating skills which could potentially cost them both money and opportunities in the end.
While you cannot always negotiate the price of a property, other terms of purchase can still be negotiated. For instance, you could try to lower the down payment or get the seller to cover closing costs. Furthermore, contingencies like inspections and appraisals from contracts should also be removed as these can create delays or even stop sales altogether. Furthermore, they could lead to unexpectedly costly surprises for buyers like yourself.
As you negotiate, keep in mind that you may be dealing with a seller looking to move their property quickly. In a seller’s market, there may be strong competition among buyers for the property; you should therefore be flexible and limit your demands in order to increase negotiating power or risk losing it to someone else. It is also important to realize that brokers may also have other client buyers interested in it as well, which may make negotiations between you and them inconclusive or cause them to leave altogether if the negotiations drag on too long.
4. Do Your Homework
Your investment property search should involve more than simply picking up any old investment property you come across; before diving in you need to research and determine what investment strategy (fix-and-flip, BRRRR or turnkey rental property) best suits you and set an early goal of which type of property to target for search purposes. Decide ahead of time how you will fund it: conventional lenders require extensive paperwork and lengthy underwriting processes while hard money lenders often require less paperwork and application forms before funding can take place.
If you are looking for an offer on your home or to join our buyers list, contact us today.