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So When Is The Best Time To Buy A House?

When you go out to buy a house, you’re going to want to buy the best house possible for the least amount that you need to spend. It’s a good idea to be cautious because you know that you’re going to be making one of the biggest purchase of your entire life when you sign the dotted line. So, when's the best time to buy a house?

Even if it looks like you’re getting a great price for your home, there are other ways that you can still try to find other advantages. Knowing when the best time to buy a house is one of the many advantages to get the best deal for the home you’ve always wanted.

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Factors That Make an Impact on the Best Time to Buy a House

Understanding Seasonal Supply and Demand

Knowing When to Start Looking at Houses

Taking the Plunge and Buying a Home

Factors That Make an Impact on the Best Time to Buy a House

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There are two main factors that you think about when you’re deciding on the best time to buy. More specifically, you should look at the surrounding market as well as your personal circumstances. You need to go into this decision-making process realizing that there are some in each case that you will have no control over.

What Are Market Factors?

Market factors include interest rates, knowing the difference between a buyer’s or seller’s market, and what you’re looking to do. Lower interest rates are better when you’re trying to pay off your mortgage in a reasonable amount of time.

When you’ve decided you want to buy a house, then you’re going to pay attention to what’s happening in the market regarding selling and buying. A buyer’s market is when the conditions are ideal for home buyers. You’ll find plenty of homes for sale and sellers typically drop prices to get their homes sold.

Seller’s markets are different in that sellers control the strings so to speak. That means that the demand for homes outranks the supply of available inventory and sellers know they can ask more for the home they are selling. In this situation, a seller can demand a high price and often get what they want.

What Are Personal Factors?

Many personal factors can influence whether or not it’s the right time to purchase a home. You need to think about your financial situation as well as your lifestyle expectations. You might not realize that maybe it’s not the best time to buy a house until you take some time and think about these things.

When you think about your financial situation, you need to consider your income and whether or not you make enough to qualify for a house payment. Your credit score will also impact whether or not you’re going to be approved for a mortgage loan. Do you have a down payment? Will you be able to afford typical home maintenance expenses along with the times when the big things die like your air conditioner or other major appliances?

Then there is your lifestyle to think about. Do you have the availability to maintain your home? That means taking the time to mow the lawn, paint the sides, and generally take care of your home inside and out. What about plans to move in the foreseeable future? Do you see yourself settling down or will you be moving somewhere else?

Understanding Seasonal Supply and Demand

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Finding the best time to buy a house isn’t exactly cut and dry. There are other factors to consider when you’re trying to figure out whether or not you’re going to move forward. Supply of homes versus demand for homes in your area of choice make a significant impact on the price you can expect to pay, but did you know that each up and down is seasonal? It’s true!

Spring and Summer

Warmer weather and longer daylight lead to more people putting their homes up for sale in the spring and summer. The supply increases, but it does not cause the price to go down. This time of year is actually more competitive, and sellers will demand higher prices.

It makes sense, though, when you think about people and their personal situations. It’s easier to move during this time of the year when you do not have to deal with potential snowfall or cold weather. Moving during the summer is also easier for families with school-age children because it offers a time of year where a clean break can be made before starting over the following school year.

Fall and Winter

When you think about cooler days, moving doesn’t seem quite so appealing. Fewer homes are available, and buyers seem to fizzle out. That doesn’t mean the buyers aren’t out there, but it does mean that homes are more likely to sit longer. As a result, prices may be more negotiable with sellers.

In the fall, families are busier with school schedules, holiday planning, all combined with weather that can be a pain to deal with. No one wants to be planning a cross-country move when little Johnny still has his Christmas concert or when little Susie is working to perform in a dance recital.

Knowing When to Start Looking at Houses

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Each month brings different challenges, so you need to know what you’re willing to do and what you’re dead set against doing at all. You want to choose buying times that are off-season, so months like January or towards the end of August present excellent opportunities to purchase a home and save money doing it.

Backtrack from your targeted home purchase time to determine a timeline that is going to work for you. Remember, your home-buying experience is going to be different from others because there may be multiple factors that are important to you compared to anyone else.

What Kind of Buyer Are You?

If you are a first-time buyer or someone that is on a strict budget, then you want to aim for a January closing, or maybe even over the Christmas holidays. To meet your deadline, you want to look sometime in the fall and give yourself a good couple of months to explore without feeling pressured.

Experienced buyers or those with a budget range may have a better experience in the summertime because there are more homes to choose from. You may be the type that is looking to move to a different neighborhood or for an upgrade from your existing house.

Another common scenario is needing to sell a home before being able to purchase a different home. If that’s the case, you’ll want to list your house towards the end of April or beginning of May. The reason for doing so is the busy time that happens at the start of June, so chances are that your home will sell faster.

You’ll need to be ready to partake in the busy time, too, to buy your home, but it may be the perfect storm that you need. Not only will you get your house sold quickly, but you’ll also be in a better place to find the home you really want to call your own.

Taking the Plunge and Buying a Home

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There’s no way around it – buying a house is a massive decision to make. It will impact your family, your future, and your very existence as you know it. A purchase like this quite literally can change your life.

When you decide to take the plunge, you need to know that you can’t control every facet of the market around you. At the same time, that doesn’t mean you can’t find the best time to buy a house if you do some legwork along the way. You’ll be better equipped to make the right choice, and as a result, you’ll be less likely to experience buyer’s remorse or wonder if there was something better out there after the fact.

Do some research for the seasonal ups and downs for the area that you’re looking for. Consider contacting a real estate agent that is local to your final destination and asking questions. If you are willing to work the market and understand when the time is right for you, it becomes possible to save thousands of dollars on the home you want. Your bank account will thank you.

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What’s the Cost of Building A House vs Buying It?

Residential Property: Cost of Building A House vs Buying

Just about all home-buyers have this question when they start considering buying a home. It makes sense, too, because who wouldn’t want to know the difference between the cost of building a house vs buying an existing home?

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Is Building a House More Expensive Than Buying?

Other Expenses You Don’t Always Think About

Landscaping Costs Money, Too

How Much Can It Cost to Buy Land and Build a House?

What About Building a House or Buying a Manufactured Home?

Is Remodeling an Older Home a Cost-Effective Alternative?

Considering Your Budget

Creating a Checklist for the Cost of Building a House vs Buying One

Making Your Decision

There are a lot of factors that go into your decision and the more knowledge you have about your options, the better it will be for you.

Is Building a House More Expensive Than Buying?

This is an interesting question because the truth of the matter is that the answer varies widely depending on your area. What we can tell you is what the average person can expect coming from an average area of the country.

Buying an existing home is typically less than buying a new home on a per-home basis, but not necessarily per square foot. As an example, on Realtor.com, it appears that a 1,500 square foot is going to run somewhere around $148 per square foot. Alternatively, a new home of the same size is going to be around $103 per square foot.

With that said, most older homes are smaller than the newest, more spacious homes. When you take that under consideration, an older home will be priced at approximately $220k. A newer home that is typically over 2,200 square feet, you can expect to pay upwards of $250k or more depending on upgrades. That’s a considerable amount over the older home.

Other Expenses You Don’t Always Think About

Older homes also have more costs associated with them as time goes by compared to a newer home. That means that you’re going to have to pay more in maintenance costs for older homes, and that can include an HVAC system, water heater, furnace, or possibly a roof.

Each of these extra repairs that are part of owning an older home can result in costs of more than $5000 per replacement depending on unit, size, or brand. With a newer home, none of these are expenses that you’ll have to pay out of pocket as they are all covered under builder warranties.

Landscaping Costs Money, Too

Existing homes have mature landscaping. Trees and shrubbery have had time to establish themselves in older neighborhoods and therefore look far more attractive than new builder landscaping. That alone can add a significant amount to your property value.

New homes, however, do not have that kind of landscaping without some extra money and input from you. Quite literally, you have to pay for any improvements on your own if you want to add vegetation to your home and it isn’t cheap.

How Much Can It Cost to Buy Land and Build a House?

image showing price tags on different parts of the house

According to Home Advisor, the average cost to build a new 2,000 square foot home is approximately $290,110. There is a whole list of issues that can cost some serious cash in everything from land and excavation through stories, shape, roof, appliances, and more.

Home Advisor offers a fabulous breakdown of the average costs you can expect to include labor costs, too. If you’re interested in custom-building a home, you need to hire an architect, engineers, and land surveyors to the tune of a few thousand dollars just to get started.

Foundations cost several thousand all by themselves. Then you add framing, walls, roofing, windows, and major systems installation. The systems installations are going to be where you will spend the most money next to the interior finishing that includes insulation, lighting, appliances, and more.

What About Building a House or Buying a Manufactured Home?

Manufactured homes are not the mobile homes of decades past. There has been a huge improvement to the way manufactured homes have become an opportunity for homeownership since the 1970s. Before then, there were no real regulations to provide safety standards for people.

Over time, manufactured homes have evolved to look like site-built homes. They have garages, second stories, and energy-efficient appliances just like a standard home. Manufactured homes are also considerably less expensive as many are under $100,000 for homes of comparable size.

Unfortunately, the stereotype still exists when manufactured homes are discussed, and trailer parks still have a negative connotation. Research indicates that the perceived property value and actual property value are markedly different. Manufactured homes don’t actually impact property value the way older mobile homes did before.

Is Remodeling an Older Home a Cost-Effective Alternative?

picturing the future home improvement project

This is another common question as homeowners discuss the cost of building a house vs buying an existing house. The question revolves around whether or not they should renovate the home they are currently in, move to an older home and renovate, or build a new home and make it the way you want it.

Other circumstances can dictate what you decide, too. Do you want to stay in your current neighborhood? Do you want to move to a different neighborhood? Can you make the improvements that you’d like in your existing home?

Considering Your Budget

Once you answer those questions, the next thing you need to consider is your budget. Is it going to cost more or less for you to renovate your existing home? Is the work worth the cost to the home, or would it make more sense for you to purchase an existing home?

This is a significant concept to think about. Just because you want to pour $35,000 into a home renovation, that doesn’t mean that it will add value to your home. If your home is only capable of appraising for $250k at the most and you owe $230k, if you spend $35k in renovations, then you will probably never make all of that money back.

On the other hand, you could always sell your existing house without renovations and get several thousand back. Then you can add those thousands to the $35k you have set aside for renovations and instead add it to a down payment for a different house that has what you want.

Once you have that figured, you’ll be well on your way to deciding which route is more cost-effective for your particular situation.

Creating a Checklist for the Cost of Building a House vs Buying One

We’ve compiled and borrowed a checklist of questions you need to ask yourself to help you decide if you want to take on the cost of building a new house, buying one, or renovating the one you have. Read through them and answer them as truthfully as you can to help you go in the right direction.

Are the renovations legal? Different locations may determine whether or not you can renovate your home at all, so you’ll want to check on that.
Is renovation proportionate to your home value? It doesn’t make sense to do major renovations to a home that won’t appraise at a higher value.
What is the market value of your existing home? If your existing home has a higher market value, it may be worth selling to buy or build a new home depending on your return.
Can your home handle the renovations you want to make? Some homes can’t structurally handle the renovations you’d like to see, so you have to be realistic here.
Do you plan to stick around for a while? Major renovations indicate a time investment, too, so if you plan on moving in a couple of years, it may not be worth the headache and hassle.
Are you prepared for the unforeseen? That could mean other problems like plumbing could pop up, or it could mean an increase in your property taxes with the change.
Is an extensive renovation something you really want? If you’re sitting at the top of a hill in a location you can’t duplicate, then a renovation may be a better option. If you’re in a cookie-cut neighborhood, it may not be worth the noise and disruption for months on end.

These questions should at least get you started, but feel free to add extra questions as you go along because more are bound to pop up.

Making Your Decision

The decision to build or buy is not one that should be taken lightly. After some discussion, you may realize that you don’t want to do either, and instead, you’d prefer to renovate.

Each situation is as unique as the people that own the home, so you need to find the answers that work for you. Don’t let someone else tell you what to do because ultimately, you’re going to have to live with the choice you make, so better make sure you and your family are happy with your decision.

Dissecting What’s Included in the Reserve Price of a House

open house sign and understanding the reserve price

If you’ve ever searched for any kind of product online, you’ve probably seen online auction sites like eBay, but have you ever seen auctions for homes? They do exist, both online and in-person.

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What is a Real Estate Reserve Price?

Making an Offer on Home with a Real Estate Reserve

What Happens When the Reserve is Met?

What Happens When the Reserve is Not Met?

Buying Real Estate in an Auction

Establishing an Account or Presenting Cash

Understanding How Earnest Money Works

The Short Sale Auction

Making the Bid and Meeting the Reserve Price

Chances are that you’ve even seen the perfect house as you search listings with something in the description that says it’s available at auction with a reserve price. What exactly does that mean?

What is a Real Estate Reserve Price?

Over on Realtor.com, someone had the same question. The individual was interested in a foreclosed property that was owned by a bank. Originally, the asking price was $34,900, and later the price was dropped to $31,410.

The property reportedly had a lien and was up for auction. According to the individual, the reserve was met, but there was no indication of what the reserve price was. In the end, there were questions about how much to offer.

A real estate reserve price is a price that the lender, or bank, is willing to accept on a given property. It isn’t always public, and it can be difficult to guess what an appropriate amount would be when making an offer.

Making an Offer on Home with a Real Estate Reserve

If the reserve isn’t met, then the owner can refuse any and all offers that were made. When deciding what to request as a reserve price, that depends mainly on what the owner is willing to do. Banks that own foreclosures typically let homes go at values that are much lower than market price but are still fair to the property and the situation.

When the reserve is not public, then you need to be fair and put out the highest number you’d be willing to pay for that property. Consider what is fair given the condition of the home if you can see it, and compare market values in the area.

In making an offer, you do need to realize that if you offer a lower price than the asking price, you may or may not get the property. It’s all a risk and a chance that you’re participating in when you make an offer on a home that is up for auction. If you make a fair offer, then you’re likely to fair better, but it’s still no guarantee your offer will be the one that is accepted.

What Happens When the Reserve is Met?

As discussed, the reserve is the absolute lowest price that the seller, most often a bank, is willing to accept for a given property. Once that reserve has been met, the seller is legally obliged to sell that property at the highest bid that exceeds the reserve price.

If the offer only just makes the reserve price, the seller is still legally bound to sell the auctioned property. With that, it’s in the best interest of the seller to set the reserve price for an amount that they will be satisfied with receiving.

Generally speaking, reserve prices remain hidden, and the only person that actually knows the reserve is the seller. In setting the reserve price, it has to be equal to or greater than the starting price. In the scenario mentioned above, it is entirely possible that the reserve price was $34,110, and hence the reserve was met. More often, the starting price is lower than the reserve to encourage higher bids.

At the same time, the reserve could have been $60,000 if that would have been fair for the condition of the house. Fairness includes taking into account the lien that would have had to be paid and the surrounding market value of the property. The bottom line is it’s a risk you have to be willing to take.

What Happens When the Reserve is Not Met?

The simple side of things is that if the reserve is not met, then the seller is not obligated to accept any offers. The seller has the opportunity to accept the highest offer, but they are not legally forced to do so.

Instead, the seller is more likely to offer the house in a subsequent auction in hopes of receiving better offers. If this happens again and the reserve is not met, it is possible to continue the cycle for as long as the seller chooses. The alternative is to have the house listed with an agent.

At the same time, if there is a house that has been on the market before in the same situation, the seller may be more willing to accept a lower offer just to be rid of the property. If you come across a house for auction, check the history to see if it has been foreclosed on and how long ago that happened.

If a house was foreclosed on a while back, then there is a good chance that this house has been up for auction before. Like any seller, the longer a house or other property stays on the market, the more likely is that the seller will be willing to accept a lower offer.

Buying Real Estate in an Auction

The process is reasonably straightforward, even if it seems complicated at first. Most sites and auction houses list properties as “as-is” which means that if you bid on one, you’re going to receive the property exactly as it stands. You may not get to see it, so you’re putting your faith in something you’ve never laid eyes on.

That also means you can’t renegotiate on price if you find something afterward like something significantly wrong with the property. It doesn’t matter if you find black mold in the walls because you agreed to buy the house as it stood. That’s what makes it scary and uncertain.

Once you’ve come to terms knowing that you have no control over the final condition of the property, you can start by getting to know the auction process.

Establishing an Account or Presenting Cash

If you’re bidding on a property online, then you’ll need to open an account and have some way to prove that you have your earnest money ready if your offer is accepted. You may require financing before getting to this point, so check with your auction site to see what their policies are regarding financial requirements.

If you’re bidding in an auction at a brick-and-mortar auction house, you’ll need to have your earnest money available right then and there along with the remainder in full. Typically, you’ll go up to a counter and present your funds as proof that you have the finances available should you win the auction.

Understanding How Earnest Money Works

In some cases, they will hold your funds for you as their guarantee that you will not back out of your bid if you were to win. Many auction sites and houses will require you to present your earnest money before being allowed to bid to protect themselves, too.

You may have even read situations where people lose their earnest money at auction sites or auction houses, but that’s generally not entirely true. Earnest money is only lost if someone makes a bid, wins the auction, and then chooses to cancel the offer.

The Short Sale Auction

Short sale auctions are auctions where the bank may not necessarily own the property, but the property might be in foreclosure proceedings. The seller, which is not the bank in this instance, could have already accepted an offer pending the bank’s final approval.

This is where it feels like things get shady. The bank can actually place the home in an auction with the purpose of getting a higher offer. It is entirely legal and allowed as the bank is legally entitled to the highest offer it can get. In short sale auctions, the bank makes the decisions even though it does not yet own the property.

If the bank puts down a reserve price on the auction, but the price is not met, then the previous offer accepted by the seller becomes the selling price. This is markedly different from a normal auction that can be placed on the market repeatedly if the reserve price isn’t met.

Making the Bid and Meeting the Reserve Price

Understanding the difference between bidding on a bank-owned, foreclosed property and a privately-owned property in foreclosure has an impact in how auctions take place, especially where reserves are concerned. It can be the difference in keeping or losing your earnest money if you don’t understand what type of auction you’re participating in and the rules that govern.

Even though sometimes these types of sales seem complicated, it’s an excellent opportunity to purchase homes well below market value, therefore, saving you thousands of dollars. It might take a little more work on your behalf, but if you’re prepared, you could walk away the proud owner of a steal of a home.

Old vs New Houses – Which is a Better Investment?

The question is not as easy to answer as it used to be. Once upon a time, newer homes were more expensive than older homes and were thought to be of superior quality. With the way times have changed, that’s not always true, but it’s not always wrong either.

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Advantages to Buying Older Homes

Advantages to Buying Newer Homes

Disadvantages to Buying Older Homes

Disadvantages to Buying Newer Homes

Other Factors That Impact Old vs New Homes

It’s Time to Buy Your Home

Neighborhoods change as do the people living in them, and entry-level homes can’t compete with some of what the older homes can offer. It’s an interesting conundrum as you compare old vs new homes to decide what is the best path forward for your situation.

Advantages to Buying Older Homes

Depending on how old the home is that you’re looking for, it is entirely possible that the older home has stood strong for a century or longer. Even if it has been there for a few decades, you know that it has stood the test of time, so you can feel good about purchasing a home built by experienced craftsman from the days of yore.

Larger Lots

More Character

Advantages to Buying Newer Homes

New homes are new shiny things that attract your eyes, but with good reason. There is a level of comfort knowing that you’re the only person that has ever been inside that home. You know every nook and cranny, why a door got replaced, or that time a wall got repainted because your toddler got a hold of a Sharpie. You know the entire history.

a new residential property in the market

Built-in Warranties

The Most Efficient

Code Compliance

Disadvantages to Buying Older Homes

As wonderful as older homes can be, there are some definite drawbacks to purchasing one of them. Many a homeowner has complained that it feels like there is always something else to replace or repair. The ground shifts over time which can result in foundation repairs or sloping floors that weren’t there fifty years ago.

Lack of Code Compliance

Smaller Storage and Living Spaces

Disadvantages to Buying Newer Homes

Newer homes tend to be called “cookie-cut” homes meaning that they look like every other home in the neighborhood. There is no customization and very little character. For first-time home-buyers, that may not necessarily be a deal breaker, though, because these homes are easier to build which means they also cost less.

By the same token, these homes will have a similar floor plan to your neighbor. If that matters to you, you’ll have to come to terms with the fact that someone else has a home nearly identical to yours in every way.

Trees Take Time

Far From City Life

Other Factors That Impact Old vs New Homes

Upfront costs can also make a difference in what you choose to buy. Older, or established, homes may cost less in your area than a shiny, new home. Newer homes may be less expensive depending on the area you’re looking at, so you need to compare the cost to what you can afford, too.

Home Histories

All the Latest Amenities

It’s Time to Buy Your Home

Buying a home is a fun, exciting time that is also stressful and chaotic. Things happen that you don’t plan for like a rescheduled home inspection, closing dates that are pushed back, or finding mold in a wall that you didn’t know about before you signed the dotted line. All of these things can be mitigated to some degree depending on the type of home you buy. When it comes to old vs new, you need to go in expecting there to be some problems in older homes that you’ll be willing to fix. If you don’t want to deal with those potential issues, go for a newer home instead. When all is said and done, you’re going to love your new home as long as you prepare yourself with realistic expectations. By weighing the advantages and disadvantages of each one, you’ll go in with open eyes, and you’ll be ready for whatever is thrown your way.

Real Estate Value: 8 Ways to Improve

a residential property that needs to improve its real estate value

As you make choices to add upgrades or changes to your home, there is a fine line between additions that improve your real estate value and other things that are little more than a personal investment that won’t do much to give you any real returns.

Knowing the difference between adding real value to your home as opposed to adding perceived value makes a huge impact on where you decide to make your changes.

Below, you’re going to find a list of suggestions that can work either way depending on your personal preference.

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8 Different Ways to Improve Your Home Value

Raising the Real Estate Value of Your Home

8 Different Ways to Improve Your Home Value

In making these decisions, you need to start by looking around at the market value of homes in your area as well as the value of your own home. You may also want practical ideas that will improve your home value quickly up front as well as for the long-term.

1. The Greatest ROI in Real Estate Value

According to Forbes, “millennial homeowners are now twice as likely as baby boomers to tackle kitchen and bathroom remodels.” That is a significant claim to make, but there is a good reason. There is a perception that these updates have the largest impact on home resale value compared to other renovation opportunities.

Kitchens are especially great because you can update with modern appliances that all match, making everything look updated relatively quickly. Cabinets are also easy to update thanks to DIY kits that exist now, and they make your kitchen makeover look complete.

Bathrooms are easy to update, too, and can be done inexpensively to update the feel by changing a toilet or upgrading a lighting fixture. These simple changes can give your bathroom a whole different impression to a potential buyer.

2. Curb Appeal is Appealing for a Reason

Everyone likes a pretty house. Healthy lawns, brightly-colored flowers, and well-trimmed trees make your home look aesthetically pleasing. Let’s face it. Buying a home is a very emotional experience, and having a good first impression can make or break a sale.

Landscaping with native plants can also improve your real estate value with a quickness. It shows that you’re in tune with your area around you and that you are concerned about improving monthly expenses like watering. Prospective home-buyers will appreciate that.

You don’t want to do anything like add synthetic plants or turf because not only does that decrease your home value, it can also hurt the environment. You may also want to steer clear of putting down a bunch of rocks and gravel in place of a lawn, also known as xeriscaping because unless it’s native, it can cause more damage than improvement.

3. Floor Plan Modifications

Yes, you, too, can change your floor plan and have a significant impact on your home value. If you purchase an older home and you want to open up the space, you might be able to take down a wall to create a more open feel.

Alternatively, if you have a large space that feels empty, you may be able to add a wall and create another room like a bedroom or an office space. Just like that, your four-bedroom house could become a five-bedroom house.

Another thing you can consider is adding outdoor space like a deck or a patio. Living space is a premium commodity, and home buyers will appreciate the possibilities of having space like that. If you have a basement, you can finish it and create yet another living space.

4. Clean Your House

One of the biggest turn-offs for prospective home-buyers is to walk into a messy home. If your house is attractive and sparkling clean, it will make a better impression on your buyer. Keeping your house clean does wonderful things for the perceived value of your home.

Cleaning includes keeping up with any problems that pop up as well as decluttering. Dirt gathers in corners, and stuff tends to cluster, too. Clean out your things for your benefit as well because when the time comes, you’ll be ready to show your house.

5. Selling vs. Upgrading

You also need to think about whether or not you’re in the mood to upgrade for yourself or to prepare your home to sell it. Understanding how the value works in upgrading or improving your home makes a difference in deciding what the purpose is behind your decision. If you intend to sell, ask a realtor to give you suggestions like replacing carpets or appliances to increase your home value. Assuming you follow the suggestions made by the realtor, total up the selling price minus the cost of upgrades and modifications to see if your return will be worth the work.

Should you decide that you’re staying and looking for renovating for personal reasons, you have more freedom to work within creating what you want. You will still need to stop and consider your budget to come up with realistic guidelines, but you may be able to take more time to make it happen.

6. Hiring a Private Home Inspector

This is one of those tips to increase your real estate value that you probably haven’t thought about. Think about what certified home inspectors do. They check the house for issues and to certify that the home is in good order.

Have you ever considered getting your house checked up regularly? Having records that show you meticulously had your house checked on a regular basis can do wonders for increasing your home value. It shows prospective buyers that you have kept up with your home for the time that you’ve owned it and can make them feel better about offering a higher price.

7. Larger Renovations

There are some major renovations that can raise your home value, but just how much depends on what needs to be done, your selling price point, and how much you’ll get back in return. As an example, you could update your home’s systems like your central a/c or gas furnaces if you have them.

Another significant upgrade that can add value to your home is the flooring. If you have carpeting, consider replacing it with a more durable flooring material like hardwood laminate or possibly an engineered wood flooring. They look good and can raise your value between three and five percent.

You can also put on a new roof. You don’t have to wait for your roof to need replacing, and having a new roof makes home buyers feel better about not having to deal with that kind of expense in the near future.

8. Smart Tech is Not Always an Attractive Upgrade

homeowner managing a smarthome through a tablet

Some smart tech is a good thing, but too much can actually cause a decline in value. It’s a double-edged sword. The key is to find the right smart devices to add. You want them to be temporary where possible because technology evolves so quickly.

Suggestions for additions to a home include things like a Nest thermostat. They look high-tech and give the feel that this home embraces technology. Having additions like the Ring doorbell do the same thing, and they can be changed as technology evolves.

Raising the Real Estate Value of Your Home

There are several different things in play when you’re deciding how to raise the value of your home. Do you want to raise the value to sell it? Are you doing it for yourself? What is your ultimate goal?

You have to be able to answer those questions to figure out what you need to do. It’s one thing to invest in a home that is your “forever” home and another entirely to invest in a home that you know you’re going to sell. Some research and elbow grease could be all you need to increase your home value. Remember, even minor upgrades like faucets, and light fixtures can fix raise your home value. A paint job in a high-traffic area can also improve the overall appeal. Doing some light work on the outside is the extra icing on the proverbial cake to raise your overall real estate value. Do it right, and you’ll be happy with the outcome.

Cheap Old Houses: Tips For Finding and Flipping Them

Maximize your profits while minimizing your expenses. That’s essentially what investment can be talked down to: doing the most with little. It’s smart business practice, and can prove to have excellent results.

Real estate has always been a hotly contested sector regarding competition, but no less so than in recent years.

a cheap old house excellent for flipping

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Go for the Cheap Old Houses

Everything Needs a Little Work

The 2008 housing crisis put the entire stock market into a bit of a chokehold, after all.

Yet, despite after such catastrophe, the market has rebuilt itself, especially when it comes to real estate. There are opportunities to be had all over the country, so long as you can capitalize on the juiciest bits available. While many investors may be looking at expensive properties, lavish homes, and exorbitant structures, you may want to take a step back. Consider all of your options. Why go for what everyone else is going for, after all?

Go for the Cheap Old Houses

That’s right, invest in what no one’s looking at. Investment, after all, is a long-term game. While these properties may not look like much now, with a little love, care, and effort they can become highly profitable at a fraction of the price. Cheap old houses can be found just about anywhere you look, and they aren’t getting a whole lot of love and care.

Sure, you’ll need to put some effort in to bring this property back up to sellable shape, but that’s a part of the job. In reality, the money you pour into fixing up a cheap old house will still be less than you would have paid for a new one. Not only will you be renovating and obtaining a new property at a much lower price than you usually would, you can even consider it a gift to the neighborhood.

Of course, now the question might be on the tip of your tongue: where can you find these cheap old houses? That’s why we’re here. Finding these sorts of houses isn’t all that hard, so long as you know how to look for them. You’re just a few tips away from finding new investment opportunities.

Find What’s Been Sitting on the Market for a Long Time

Let’s face it, cheap old houses are generally not at the top of the list when it comes to purchasing real estate. The longer they sit, and the worse shape their in, dictates a certain value about them. These properties tend to fall to the back of the line, where they’re left without any new buyers to view them. Think of it like finding a dog at the pound. Ideally, the longer a house sits on the market, the lower the seller will sink to to get it off their hands. No one wants to be paying for two houses at the same time. That’s extraordinarily expensive.

Old houses usually have problems that buyers aren’t interested in dealing with: structural damage, poor location, fees and the like. They might simply not be looking far enough ahead. Cheap old houses aren’t going to be first on the list, that much is clear.

Your job is to find the diamond in the rough.

Make sure to ask the right questions as well. Why has this house been on the market for so long? What’s the neighborhood like? What caused the previous residents to vacate the premises? Gathering information is crucial to evaluating the worth of a property.

Find Houses That Have Been Foreclosed

The very thought of having a foreclosed home may send shivers up your spine. However, if you’re investing, then it could very well be the next best opportunity for you. Someone may be miserable because of it, but what’s done is done. You can make your move now.

Foreclosed homes happen because a homeowner fails to pay their mortgage. If they do, the bank takes their home, and they’re forced to sell it. These offer some of the best deals you can find on the market. You may be thinking that these are relatively recent vacancies.

That’s generally not the case. There are more than enough foreclosed houses that banks have been sitting on, waiting to get rid of. That’s where you come in. Sometimes these foreclosed homes may be in horrific shape, but certainly not all of them. It might take a bit of picking through the rubble, but you’ll find gems amongst the ash and dust. Sort them out, brush them off, and give them a thorough examination. If you don’t find something that fits your interest, give it time. Something is bound to show up. Foreclosed homes generally have a bit of a stigma to them. They’re considered to be less than viable investments, properties that have irreparable damage, or are below market value for good reason. That’s certainly not always the case. While other investors may be looking at the higher-end models, finding a cheap old house can easily beat them out in the long run.

Search Low to High

This tip may seem a bit obvious, but it’s easily overlooked. Whenever you’re looking for new real estate opportunities, make sure your search takes into account what you’re looking for. For the most part, real estate searches list potential properties by high to low, by what have been put up most recently, or by some other category. They never start off by listing low to high.

Now, these properties don’t take into account several important factors: neighborhood, condition, or competing values. However, these are the best sources to start with when you’re looking for cheap old houses. They may not look like much, but they offer more than what you can see from the curb.

Look Constantly

There’s a good chance you won’t find what you’re looking for immediately. You may get lucky, absolutely, but we wouldn’t wage our best on that happening. Those who persevere are those that find the most success. Perhaps you don’t find your ideal house at first, but you need to keep looking until you do.

house with a modern look and a pool as its attraction

Cheap old houses are tossed around the market, transferring from owner to owner. There are plenty of sellers that don’t appreciate their real estate for what it could be. Essentially, their loss is your gain. If you spy a property that fits something like this description, take initiative. If you aren’t sure, don’t be afraid to ask questions. Your peers will provide you with all the information you need.

Ask Around

Networking is the most essential resource in the investment market. Communicating with both fellow investors and sellers permits untold amounts of information to gather valuable intel for investment. The fact is, one piece of information leads to another, and that leads to another. Everything is connected.

The most you ask, the more likely it is you’ll find something you need. The more cheap old properties you find, the more offers you’ll be able to make. Don’t be afraid to skimp on the amount of offers you make before making your perfect offer. Make as many offers as you can afford. Sure, you might find that ideal property you’ve been looking for, but there’s no guarantee that you’ll get it. If you make offers on several properties, you’ll have more chances of succeeding on one of them than none. You don’t want to come away empty-handed, after all.

Everything Needs a Little Work

You might get lucky and find a cheap old house that doesn’t need much in the way of repair. Those opportunities are certainly possible, but waiting for one to fall in your lap is optimistic to say the least. Rather than expecting success to waltz across your doorstep, you should go out and earn it. These properties may not be the nicest at first glance, but they certainly can be. Being an investor is a source of pride. You need to have pride in your work, pride in your investments, and pride in yourself. What’s more impressive, investing in an established property or building something up from nothing? Finding value where there initially seems to be none is the hallmark of a great investor. If you need to put a little legwork into perfecting a cheap old house, all the better. When you flip it, it’ll be making all the more money for your efforts.

Real Estate vs Stocks: Which Way You Should Go?

The glory of the investment market lies in its infinite ability of choice. There are too many markets to enjoy, too many opportunities to pursue than can be sought in one lifetime.

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Do You Like Real Estate?

A Sense of Control

Long-Term Income Generator

The Responsibilities that Come with Investing in Real Estate

Investing in Residential Property

Investing in Commercial Property

Do You Like Stocks?

Liquidability.

Which Is Better: Real Estate vs Stocks

What Should You Choose?

If you’re looking for a future where you can invest, then you’re going to come to a crossroads: real estate vs stocks. While they may be similar, they’re benefits and functions are vastly different. Investing is complicated. Knowing what to invest in, what not to invest in, and what are the best opportunities takes a lot of work to understand.

woman having difficulty to decide where to put her money

In the end, whether to choose real estate vs stocks comes down to your personal preferences. There’s ample opportunity for success in both sectors after all. Are you a hands on person, or do you prefer sustainable, intangible profit? In reality, one is not better than the other. There’s no superiority, only a difference in field and focus. Each style of investment would have come up with vastly different results in various parts of history. For the modern age? It comes down to what you personally prefer to invest in.

Do You Like Real Estate?

Real estate is comprised of properties, whether they be intended residential or commercial. The fact of the matter is that they are real and tangible investments that can be physically interacted with. Having a preference toward investments that are physical is absolutely something to take into consideration.

A Sense of Control

When it comes to real estate, there’s a greater feeling of control. Unlike with stocks, having the capability to interact, change, and improve your properties gives an incentive to appreciate your investment value. If something is broken, you can fix it either yourself or by hiring a qualified company. Having the capability of altering your property can result in greater returns.

Long-Term Income Generator

clock and coins representing income generation

Real estate is one of the oldest methods of investment. For as long as civilization has existed, people have needed somewhere to live. In the more modern era, real estate provides consistent, dependable returns, both initially and for the long-term. Establishing yourself as a real estate investor means a steady supply of income for years to come.

The Responsibilities that Come with Investing in Real Estate

However, there’s still the price to pay with that investment. Unlike with stocks, investing in real estate usually comes hand-in-hand with down payments, hefty real estate prices, and recurrent expenditures. Purchasing real estate comes with the responsibility of tending to that property. You’ll need to repair it, cover fees, running costs, and ensure that there are tenants to provide income.

With hands-on control comes hands-on responsibility. If you’re able to handle the issues with your own handy capabilities, then all the more power to you. However, you may own properties that are out-of-state, or you might not be a handyman yourself. Being able to handle a physical investment is double-edged sword.

a guy standing with skyscrapers as background

Investing in Residential Property

If you decide to invest in a residential property, then you’re going to be dealing with tenants. Typically, any residential real estate can house up to one to four families before being considered commercial. While purchasing residential property can result in becoming a landlord, there are other options. For instance, you can flip the property or develop the land score higher profits.

Investing in Commercial Property

Alternatively, if you decide to invest in the commercial side of things, then tenants aren’t going to be an issue. Rather, your primary source of income is derived from rent or from profit-generating activity, like businesses and and the like. You’re less likely to have to deal with consistent damage, but investing in commercial real estate does come with higher startup costs.

Do You Like Stocks?

Unlike real estate, investing in stocks won’t be nearly as hands on. You won’t have to work nearly as hard to ensure your stocks reach their maximum potential. There are no property fees, no repair expenses, no tenant difficulties. Everything is, for the most part, insubstantial and viable in their own rights. If you find that you don’t want to pour a lot of your time, energy, and focus into maintaining the integrity of your investments, this may be for you.

However, the lack of hands on accountability means you lose the control you would have over your investments. When you invest in real estate, you are allowed a stronger say in how the property is managed. When it comes to stocks, you don’t have that luxury. As long as you’re invested in stocks, the control is levied with others’ business capabilities.

Being forced to suffer from a near total lack of control can turn out to be uncomfortable for some. For some, however, allowing your investments to succeed or fail at the whims of others’ business prowess may be what you’re looking for. Taking a more passive approach to investment, especially when it comes to deciding between real estate vs stocks, helps determine the speed at which you’re comfortable at.

There are, of course, more benefits to be had when investing in stocks than we’ve mentioned. Sure, you may not have the same level of control as you might have with real estate, but do you know what you do have?

Liquidability.

It’s easier to liquidate stocks than it is with real estate. Having that capability provides some measure of versatility and leverage power.

various graphs and statistical representations

Which Is Better: Real Estate vs Stocks

It all comes down to what you prefer, in the end. Do you prefer having control over what happens in your investment? Or do you prefer having the versatility in a non corporeal asset?

For the most part, real estate and stocks share common ground in being passive income collectors. You will, of course, need to check in on them to ensure they’re proceeding well. However, you won’t need to be foreman watching over your workers to ensure they’re pulling their weight. You invest, then you wait for your return on your investment.

The biggest difference between real estate vs stocks is your involvement, control, and investment in the matter.

When it comes to stocks, you’re actually more likely to make profit. However, when compared to real estate, stocks are more likely to be volatile and shift with the market. For steady, longer-term commitments, real estate is steadier and more reliable.

Real estate vs stocks is like comparing apples to oranges. They’re both fruit, true, but they’re vastly different in virtually every aspect. They have different purposes, varying styles, and opposing attributes found between real estate and stock investments. The bearing they have on your overall income is reliant on your own circumstances.

What Should You Choose?

Our best advice is: go off your gut instinct. If you feel like you’re in a position to passively earn consistent income for years to come, real estate is your best bet. If you’re willing to play the markets and take a chance on a volatile commodity, stocks it is. When you confront the bottom line of choosing real estate vs stocks, there’s no wrong answer. Both real estate and stock investments provide, with proper business acumen and skill, valuable income returns. The most important part when it comes to choosing between them is understanding your personal situation first. Having a firm understanding of your financial situation is truly what dictates what sort of investments to involve yourself in. If you feel the need to take a risk to win big, then follow the route that suits that best. If you have some buffer room to reassure your financial security with, then going for the long game might sound enticing. To quickly round up the differences of real estate vs stocks, we’ll leave you with this.

Real Estate: Investing in real estate gives you control over a tangible property, allowing you to have a stronger voice in how your investment operates. While you may not immediately make large sums of money, real estate is historically steady, consistent, and reliable. However, it is also not liquid-able, so you may be stuck with it for a while.

Stocks: Investing in stocks restricts the amount of control you have in the matter, but also provides easy, trade-able capabilities. Though you may have liquidity with your investments, it’s also much more prone to the volatile nature of the market.

The bottom is going with the investment that fits your personality the best.

How to Calculate Yield of Property Investments

The many factors that boil into what makes a property valuable can eventually be traced to one thing you want to know. That desired number is what is known as your property yield. A healthy return on your real estate investment is vital toward maintaining your lifestyle and prosperity. Ergo, you may want to conceptualize how much your property is going to earn for you.

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What Factors Affect Property Yield

How to Calculate Yield

Why Is Knowing Your Property Yield Good

Your property yield, in basic terms, is how much of a annual return your property will earn. There are many sort of factors that determine what your precise yield will actually be, all of which can be included in the calculations. Starting off with a baseline estimated return is the best place to start with, however. This isn’t something that can be overlooked, especially if you’re expecting to break even on your owned property.

What Factors Affect Property Yield

Saying “everything is a factor” would be true, but that’s not helpful. When we talk about how to calculate yield, we can look at how it can develop in two ways: gross and net. Both are estimations of how much profit you’ll have either gained or lost by the end of the year.

Gross Yield vs Net Yield

Tenants

Repairs and Running Costs

How to Calculate Yield

There are two different calculations to perform if you want to find either your gross or net yield. Successful management of your properties requires an authoritative grasp on your potential returns by the end of the year. Knowing all of your property yield outcomes will help you achieve the highest return at the end of the year.

Both the gross and net yield calculations return as percentages. When learning how to calculate yield, you will be comparing everything against the initial market value of the property when you purchased it. For example, if you purchased a property for $150,000, then every property yield will be working toward covering that cost, so to speak.

Calculating Gross Property Yield

Calculating Net Property Yield

Why Is Knowing Your Property Yield Good

It’s simple really. It all comes down to evaluation and planning. Real estate is in constant demand across the United States, and that demand has a heavy effect on your yield when you’re purchasing a property. High demand for real estate means that you’ll need to pay more to invest in a property, and that will impact your overall return. However, vice versa, in times when properties are not in demand, you’ll gain the benefit by purchasing real estate at a lower asking price and increasing your overall return. Regardless of when you’re looking at a new property, you need to make sure you have a plan in place to account for your expense. Frankly, real estate is expensive, and you want to pay off that expenditure as quickly as possible. If you know what your gross and net yields are going to be, then you’ll have better game plan ready for when you begin leasing or renting out your space. Make sure you’ve calculated your expenditures, your returns, and your liabilities before making any decisions.

What Makes A Qualified Investor

As much fun as it could be, your random average joe won’t be able to walk up off the street and haphazardly invest in whatever they like.

Did I say fun? I meant disastrous.

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So What Makes a Qualified Investor?

What You Will Need to Prove You’re a Qualified Investor

Completing Minimum Requirements

Common Qualified Investor Pitfalls

Final Thoughts on Qualified Investors

A market without some measure of verification could be easily run amok by bad trades, illegitimate investors, and fraught with a calamity of issues. Those who want to have the full scope of investing need to become accredited.

Becoming a qualified investor, otherwise known as an accredited investor, is essentially a status symbol.

It’s a show of credit that you’re qualified to make investments in hedge funds, venture capital funds, private equity offerings, and more.

Once you’re approved to legally invest in these sectors by the Securities and Exchange Commission, you’ll gain access to a whole new investment field.

So What Makes a Qualified Investor?

Glad you asked. As you may have ascertained yourself, there’s certain criteria you’ll need to meet in order to become a qualified investor.

There aren’t any tests or bar exams to pass, just proof that you can put your money where your mouth is. If you’re planning on becoming a qualified investor, make sure you have all your necessary documents on hand. The Securities and Exchange Commission will need it for verification.

How Much is Your Yearly Income?

The primary method of verifying whether a potential investor can be qualified is by examining their yearly income. If you’re independently earning a strong, steady income, then you only need to have an annual earning of $200,000. With an income of this magnitude, you’re considered a reliable investor who’s worth qualification.

Alternatively, if you have a spouse, then your total annual yearly income can be capped at $300,000 instead of $200,000. While that is a little bit more, it’s more easily achievable than being solely responsible for independently earning $200,000 a year. For instance, if both you and your spouse earn $150,000 yearly, then you can be a qualified investor.

Of course, if this is the first year that you’ve earned $200,000, you won’t quite be able to become a qualified investor. You’ll need to prove that you’ve consistently earned this hefty sum for three years in total. If you’ve earned an annual figure of $200,000 for the previous two years and have reasonable expectation you’ll earn the same come the end of this one, then you can qualify.

How Much is Your Net Worth?

Simply making a decent income isn’t the only requirement needed to be verified as a qualified investor. While your annual income is the most secure and manageable method, your net worth is just as valid and necessary. Anyone who has a net worth of over $1 million qualifies, even if they don’t meet the minimum yearly income. However, you can only be considered as being worth $1 million and still be a qualified investor if you do so without including your primary residence.

a typewriter on a wooden table with a bunch of stuff

This addendum for the rule was passed with the Dodd-Frank Act, which was in turn passed in response to the housing crisis of 2008. The purpose was to lower overall risk regarding investors to prevent further collapse in the future. By excluding the primary residence from being included as a part of net worth, investors are forced to be more financially transparent.

Essentially, you can live in a lavish house, but make less that is minimally required to function as a qualified investor. Such an inclusion in the act ensures financial safety, stability, and accountability regarding any future investments.

What You Will Need to Prove You’re a Qualified Investor

For the most part, becoming a qualified investor isn’t like joining a club. There are no badges, certificates, or processes to jump through before receiving the honor. The bonus of being a qualified investor is having access to a variety of unregistered securities.

Securities are stocks, bonds, and notes that can be sold to the public. However, they have to first be registered with the SEC before going on the market.

Selling an unregistered security is considered a felony. However, there are exemptions to the law. In this case, that exemption falls under selling unregistered securities to qualified investors. This is a small market of people, since the investment world is primarily populated by unaccredited investors who don’t meet the qualifications. It’s an incentive of sorts to aim for that particular criteria of members.

Completing Minimum Requirements

The minimum requirements, as we’ve gone over, are the first step toward becoming a qualified investor. However, there’s no actual formal accreditation system to automatically permanently verify a qualified investor. Sellers need to run verification themselves. It’s the due diligence to ensure everything is above board.

The first step of verification is filling out a questionnaire provided by the issuer of securities. The purpose of this questionnaire is to provide the essential information verifying any qualified investor. Included with a finished questionnaire will typically be a few essential documents. These usually include financial statements, account information, and other verifiable forms of asset liability.

Credit Report Investigation

Annual Income Verification

Common Qualified Investor Pitfalls

Knowing what makes you a qualified investor is a good start, but there are certain caveats to be aware of so you don’t make any unwarranted mistakes. Due to the nature of purchasing unregistered securities, the advantage is a double-edged sword. They may be valuable, but they also carry more risk.

Since these unregistered securities are exactly what they say they are, they aren’t regulated by the SEC. The onus of finding a good deal on these investments involves extra effort on your part to validate them.

Doing your own homework and due diligence will become a must to ensure you aren’t making a bad investment. This, unlike with regular regulated stocks, carries more of a challenge on your half of the deal.

Joining an investment group should be a priority when dealing with unregulated securities.

While you won’t have the same support as the regular market, having other investors to bounce your opportunities off of can add needed assurance, warning, and competence.

Qualified investors will also need to deal with higher fees and higher minimums to stay in the market. As long as you have a sustainable bank account with cash flow, you should be alright. However, the higher the fees, the more they will eat into your returns. Any expectations for investments similar to those regulated by the SEC should be kept low.

Final Thoughts on Qualified Investors

Being a part of a lucrative circle of investors has its ups and downs.

What doesn’t?

For the most part, however, if you’re skilled, the benefits outweigh the detractors.

Having the capability to quickly capitalize on investment opportunities without having to fight with non-accredited investors is invaluable.

You’ve heard the phrase “the early bird gets the worm” before.

To make the best out of being a qualified investor involves dedication and a standard to yourself. While you have an immense opportunity, it can just as easily bite you if you aren’t careful.

So long as you do your due diligence, ensures your papers are in order, and stay on top of your investments, becoming a qualified investor could be the best decision you’ve ever made.

Undervalued Properties: Effective Ways to Buy Them

sample of Undervalued Properties available in the market

Planning ahead is the nature of being an investor. Every financial decision is weighed against how the markets will shift in the future. When it comes to real estate, you’re looking for diamonds in the rough. Undervalued properties are essentially what you’re going to be looking for. Every now and then, you’ll find a gem that fits the mold of increasing in value.

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How Do You Go About Buying Undervalued Properties?

Focus Is the Key

The question then is: how do you go about buying these undervalued properties? How do you find them? Combing the market without having an idea where to search out these prizes can prove to be tedious and fruitless. To help pull you out of that rut, we’re going to provide some tips on how to find and buy undervalued properties.

How Do You Go About Buying Undervalued Properties?

As you might come to expect, as any investor will know, searching out undervalued properties requires research and focus. However, once you have an angle on what signs point toward undervalued properties, the search becomes a little easier. There are deals to be had in every corner of the United States. All that you need is to be a little forward-thinking.

slightly damaged house but valued lower than its actual value

Compare the House to Its Peers

To have the best chance of finding that one house hidden in the weeds, you need homes to compare it to. For this, you’ll need to look a bit beyond simple looks. The best undervalued properties may very well end up being the houses that aren’t pretty to look at. They may have an ugly paint scheme, peeling wood, a rickety porch, and that’s only on the outside.

Here’s where the forward-thinking comes in.

To find the best undervalued houses, you need to see their potential. Compare a $250,000 house to the houses neighboring it that are worth twice as much. It may have been a great house once, but time and use have scraped away its former glory.

Oftentimes, the burden falls on you to return it to its original glamour.Putting in a little legwork is good for investment. It may take some spending, some hard days in the sun, and a whole lot of work, but the end result is a house just as good as the rest on the block, perhaps better. Buying a house that doesn’t quite stand up to par is seeing the future that it holds. It’s an exercise in boldness, tenacity, and insight.

Investment always has a few risks to it. However, if you play your cards right, this crummy house that you polish up to a sheen can exponentially increase in value as the neighborhood develops. It may not look like much now, but given time, its value will catch back up to it. All you need to do is provide it the means to do so.

Examine the Market

This may seem a little bit obvious, but thorough examination always overturns new leaves. However, what you’re looking for now are houses that have been sitting for months on end.

Usually, there’s something about these houses that make them somewhat undesirable to would-be buyers. There’s any number of reasons that have led it to this waitlist: overpricing, low quality housing, skeptical seller, you name it.

The primary factors that determine whether a house will sell quickly are price, location, and condition. Each of these variables may independently be responsible for houses left gathering dust on the market, or it could be a combination. However, just as these factors determine a house’s worth, they are also indicative of their potential.

A house that has been left on the market because of an overpriced offer can be difficult to wait on becoming undervalued. You may not want to wait on these houses quickly dropping down to a reasonable, profitable level. However, the longer they wait, the more likely it’ll be that they’ll become open to new offers.

the interior of an abandoned and damaged structure

Sitting on a house isn’t comfortable for any seller.

As far as location goes, you’re going to have a bit more luck. Areas that have experienced sudden changes in economic stability tend to have houses that plummet in value. This is an excellent time to capitalize on undervalued property. While the location for the time being isn’t as presentable as you’d like it to be, you’re looking at the long game. The region will recover, and when it does, the value of your real estate will rise with it.

As we’ve already addressed, the condition of the house plays a heavy part in how long it’ll stay on the market. For the most part, no one wants to buy an ugly house. What’s not to focus on is the looks, but rather the potential. Once the house has been renovated, it’s going to be much more impressive than when you snagged it.

Study the Sellers

A fantastic way you can go about buying an undervalued property is by looking at the people selling them. Sellers will tell you a lot about the value of their property, and can give away just how undervalued their house is. What you need to look out for are the motivated sellers that want to get their property off their hands.

There are a few questions to ask when you find a motivated seller. Why do they want to get their property off their hands so quickly? What are the circumstances surrounding the seller? How willing are they to negotiate?

Negotiation is going to be the key factor here. While the seller may be looking at a reasonable price for their property, an understanding of the situation can make that price malleable.

A good source to find information about the state of the seller’s position, as well as the overall value of the property, can come from any involved real estate agents. An agent won’t publicly announce an eager owner, but networking goes a long way. A private one-on-one with an agent can help reveal a method toward a bargain deal - especially if you provide a little motivation yourself.

Making the agent’s life easier is one of the quickest ways to negotiate a better value for the property. If you guarantee that you can close on the house quickly for a cheaper asking price than what is asked for, a motivated seller may become pliable. What’s important to remember is that they want to get this property off their hands. If that involves taking a lower sum, then so be it.

Pay Attention to the Economy

We mentioned before that economic shifts help determine undervalued property. If there’s a huge layoff in an oil centric city, property values may fall.

While things may seem grim in the short-term, and not very enticing, what’s important to remember is that the economy bounces back. Temporary upheavals in job security, economic growth, and property values spell out opportunity.

Attention to detail is critical.

If you’ve found that a section of the country has been hit hard by layoffs, recessions, or other changes that impact the worth of local real estate, it’s worth paying attention to. If you succeed on investing in undervalued properties in the present, all that’s left is to wait for the region to bounce back.

Counting on the inevitability of economic resurgence will return these undervalued properties to better standing. With proper timing, though it may feel unsavory, these areas create prime investments.

Focus Is the Key

The presence of undervalued properties on the market is never going to be forefront.

Most investors are going to be concerned with obvious, prime real estate.

If you’re going to find new opportunities for investment, you’re going to have to wade in and search it out yourself. It doesn’t matter how many tips you know, undervalued properties generally don’t reveal themselves.

Any investor knows that focus, dedication, and tenacity are the strong points of a successful investment. You may not find what you’re exactly looking for now, but the real estate market is constantly changing.

If you give it a little time, more and more properties are going to show up. Having a little bit of patience goes a long way.