By Kathy Henne
Contibuting columnist
With uneven stock market performance and bank deposit interest rates at disappointing levels, you may have been reading lately about how many investors are turning to real estate.
If you don’t regard yourself as a big time investor, but have some interest in how it all works, consider some basic ways to get started. The strategy is simple – try to make a good investment.
Some people try to purchase foreclosures. These are homes where the owner has been unable to keep up with the payments and the bank or mortgage company who holds the mortgage forces the property into a sheriff sale. If you go down to the courthouse and try to purchase one of these foreclosure properties, you’re in for a bit of a surprise. Usually the bank or mortgage company who holds the mortgage purchases the property before you can get your mouth open to bid and at a price higher than you would be willing to pay. Then that bank or mortgage company puts the house back on the real estate market with a Realtor. Most of the time the property is listed at a price lower than the bank or mortgage company paid for it at the sheriff sale. This is good news for the potential buyers like you.
You’ll need to be handy or have the money to pay a contractor to fix up the property because most foreclosure properties need a bit of work and some need lots of work. They may need a little work like replacing the carpet or updating the interior. Or they may need a lot of work like replacing broken pipes or repairing the roof. The former owners may have abandoned the property in October and didn’t drain the water lines. So it sat all winter with water in the lines but no heat in the house. These frozen water pipes result in broken pipes and interior damage. Here’s where you need the professional advice of your Realtor. You don’t want to buy a home at a price that is so high that you cannot to turn a profit on the property after you make the repairs.
A great way to pay for your child’s college education is to buy each child a college fund investment property. To do this, you purchase the investment property when the child is young and rent it out. The renter covers the monthly cost of the property. When the child is old enough, the child helps with mowing the lawn and repairs to the property. Then when the child is ready for college you can sell the property and pay for the child’s college education. It’s like having the renter put money away for your child’s college instead of you scrimping and saving for it.
Of course, there are many ways to get involved in real estate investments. Call your local Realtor for guidance and get started.
Contact the Kathy Henne Team Re/MAX by calling 937-778-3961
