Buyer's Guide for Rental Investment Properties

RENTAL INVESTMENT PROPERTY BUYING GUIDE TIPS

If you have already invested in rental investment properties in the past, this site should reacquaint you with important factors involved in the buying process. Hopefully it will serve as a reminder of the methods and processes that will help you maximize your returns.  If you have never invested in rental investment properties in the past, this guide will help you get there to invest successfully.

Of course there are many types of real estate commercial and rental investment properties for sale within the Windsor / Essex County region, each with its own Pros and Cons. Many investors initially start with their own home, they renovate it to maximize value, refinance to pull maximum equity, rent it as a single family home then purchase another home. Eventually they may move up to duplexes, triplexes, fourplexes, etc up to apartment buildings.

One of the best things about Apartment Buildings is that they are STABLE and low on the risk spectrum. Once you understand operating statements, key ratios and cash flow analysis you will understand that apartment buildings can produce a steady cash flow. The more apartment units your complex has, the more steadier your cash flow will be. If managed properly, and renovated to achieve maximum rents, they can generate substantial positive monthly cash flow and high returns upon resale. Operating them can be as simple as collecting rent and paying monthly bills.

From a financial point of view, the most important thing to remember about multi-family properties for sale regardless of the investment type, is developing a clear understanding of operating statements, key ratios and cash flow analysis, your real estate agent professional can assist you in understanding these principles.

With every investment rental property venture being different, incorporating these FIVE STEPS into your purchase strategy before you purchase, will help you avoid costly mistakes.

Step 1 - Needs Analysis

• Assemble the Services of a Good Professional Realtor
• Learn Responsibilities Associated with Owning and Managing Investment Rental Properties, both Pro's and Con's.
• Get pre-approved, bank financing will require a 20% down payment.
• Establish a Preliminary Capital Purchase Budget.

Step 2 - Strategic Plan

• Define Purchase Objectives.
• Define R.O.I  and Cap rates requirements.
• Define Property Type Selection Criteria.
• Define Preferred Locations Criteria.
• Define Building Condition Requirements. ie Fixer Upper or move-in ready.
• Define if you want tenant occupied or vacant.

Step 3 - Market Evaluation

• Identify Market Trends Pricing.
• Identify Market Trends Vacancy Rates, Rent Amounts.
• Assess Neighborhood locations.
• Assess Neighborhood Competition.
• Tour/Inspect Property Options.

   

   

Step 4 - Selecting Alternatives

• Rank Alternatives
• Define Immediate Improvement Requirements.
• Refine Immediate and Long Term Project Budget.
• Redefine Immediate and Long Term Cash Flow Analysis.
• Assess Return On Investment Ratios.
• Assess Capitalization Rates.

   

   

Step 5 - Negotiations

• Establish Negotiating Strategy Offer Amount and Conditional Terms.
• Negotiate One or More Purchase Offers.
• Undertake Due Diligence.
• Building Inspections.
• Complete Conditional Agreements.
• Closing.

Incorporating these important FIVE STEPS into your purchase strategy before you purchase, will help you avoid costly mistakes.

Buyers

In Today's Competitive real estate market timing is everything. Many good investment properties for sale are sold before they are advertised. To beat out the competition, if you're thinking of Buying a rental investment property in the Windsor - Essex County Ontario region, begin you search here with my New Listings Notification.

Sellers

If you own an investment real estate rental property within the Essex County Region that you're thinking of Selling, I would be happy to provide you with a FREE No Obligations Property Valuation.

Compliments of Ron Klingbyle a full time top producer real estate professional serving Windsor and the surrounding Essex County Community Areas. If you're thinking of Buying or Selling a home, investment or commercial property or relocating to the Windsor / Essex County Area? Contact me I can help, let my consistent, proven accomplishments and lifetime experience in real estate go to work for you.