As an investor, you are always looking for a great deal, but how can you tell? Here are 5 signs of a great deal when buying Long Island real estate.
No Zoning Issues or Liens
It is important that you research a potential investment for any zoning issues or liens on the property. If the property you are interested in doesn’t have the right zoning, you may not be able to use the property for your original plans. It is also very important that your intended property does not have any liens on it, for if you did purchase it, they would then become your responsibility to pay, and that would cut into your return on investment.
No Expensive Repairs
If a property you are interested in does not have any serious structural issues, then it is probably worth submitting an offer, even more so if the price is right! Even if the property has a slightly outdated kitchen, you don’t have to replace it if it’s still functional or not destroyed. You don’t have to follow the TV hype of remodeling every kitchen and bathroom of every investment property you purchase. It is ok to remodel them as your budget allows, even if it takes years. You have to make sure the property is profitable first before investing any more money than absolutely necessary.
Priced Near Assessed Value
If a property is priced at or below the county assessed value, you can be sure it is a great deal! Market value is usually between 10-25% above the county assessed value. You need to be careful, because if a property is priced that far below market value, it may have some damage or some other reason why it is priced so low. You may be lucky and have a seller that is extremely motivated with a great property. On the other hand, you may have just found a bank-owned property and it might have some damage.
Passes 1% Rule of Thumb
There is a general rule of thumb that real estate investors use when determining if the price of a property is a good deal. They say that the property should rent for about 1% of the purchase price. For instance, if a property should rent for about $1,400 then the ideal purchase price would be about $140,000 for it to turn a profit. In order to use this rule, you will have to analyze the fair market rental potential of the property.
If the property already has fairly decent curb appeal, then that is just icing on the cake! That is hundreds or possibly thousands of dollars saved from potential renovation costs. You will also want to take a look at the overall silhouette of the home and make sure it looks square and healthy. Another important factor of curb appeal is a straight roofline. Sometimes when additions are made or the property withstood damage, the roofline may slope slightly, or might not match the overall composition of the house. Another thing to watch out for is different siding treatments on the home. This may also indicate an addition that lends itself to having structural issues.
If you are a real estate investor looking for a great deal when buying Long Island real estate, then call CoMax Properties today at (516) 704-7025. We will handle all of the legwork to look for your ideal investment property, simply provide the features you are looking for and we will provide you with some options.