2013 . . . Is it Time to Buy Another Property?

When is it a good time to buy real estate?  Some will say, “it depends!”  It depends on the goal.  If you are looking to buy something and turn around and sell quickly for a small profit (a.k.a. “flipping”) make sure you know what you are doing.  Having a professional Realtor(R), qualified handyman/contractor is essential.  If you are not getting financing and can use 100% cash to purchase you are likely to be able to negotiate and purchase properties in the current market.

Most “flip” buyers are looking to make a certain minimum profit (for example: $10,000).  If that is your minimum profit you need to calculate the cost to purchase, rehabilitate, total to resell; including commissions, escrow, title, etc. and any capital gains taxes (consult your tax professional).

Flipping can be lucrative if you know what you are doing.  If you don’t and don’t have 100% cash to buy . . . consider buying as an investor and renting property long-term (a.k.a. “buy and hold”).  I recommend hiring a professional property management company to manage the property.  Do the math before you buy.  In this market most purchases will equate to a good positive cash flow.

I know several individuals who own 3-4 properties and have a nice retirement on their rental property income.  You have long-term income and equity growth over time.  Also, someone else is paying your mortgage.

I recommend consulting your financial adviser and tax professional but in most cases its a great investment if you count the costs and arm yourself with knowledge and information.

 

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