Tips for a successful investment in the real estate market

• Location its one of the most important point in real estate. Try to always be close to schools, beaches, transport and main attractions.
• Negotiate the price of everything. From the house price to the renovations. If you don't ask you will never get.
• Learn from your mistakes- A mistake can be a lesson for your next investment
• Buy with your brain not with your heart. 
• Look to gain not only capital growth but also get cash flow.
• Educate yourself before you buy. 
• Make sure that who give you advise its because they "been there and done that" 
• Make sure that you can afford the mortgage repayments.

Property strategies when buying property in the USA

There are 3 basic strategies when you buy properties:

1. Buy and hold- If you buy the property in good condition or already renovated then its likely that you would like to go for buy and hold. In a market where the property its still dropping in value you can not expect to make a profit if you buy and sell. With time properties are always likely to bring some capital growth. Make sure that you choose your property wisely to maximise the returns.
2. Buy renovate and hold- With this strategy you are likely to improve significantly the returns of your rentals. Make sure you keep the expense of the renovation within budget. Be aware that this will need more of your time and efforts as well as the funds available for the renovation.
3. Buy renovate and sell.- also know as flipping- This can be profitable but at the same time it can be high risk. You have to make sure that you buy in the right area, be well aware how much is the renovation going to sell and have a good idea of how long it might take to sell it.. it might be longer than expected.  Always keep in mind that higher returns comes hand by hand with higher risks. 

Reasons why is a good idea to invest in proper

Here are some of the reasons why real estate its always a good investment:

• People will always need somewhere to live
• Over time they always tend to go up in value. Its one of the only investments that if you didn't pick the right house it still bound to rise in value if you are happy to hold on to it.
• Over sixty percent of the people listed in the most wealthy people in the world have invested in property.
• There is little or no cost on holding on to a property if you have it tenanted and can provide cash flow positive
• You can add value by renovating it. 
• It's a very stable investment

DIY vs Aussie Agent

There is a pro and cons for everything, here are outlined the pros and cons of doing it yourself vs using an agent.

Using an Agent:

Cons
You will get a lower yield of around 12 to 18%
You will still have to do your own due diligence as you can not rely 100 per cent on their due diligence.
There will be extra cost involved on simple steps like setting up LLC, etc
The agents job comes at a price and you will find that some of the properties are marked up
You might still want to travel to the US to check up the property in which case you are still spending money reassuring their due diligence.

Pros
You could get away with not flying to the US to inspect the property.
You will have a back up of your own due diligence.
They will guide you all the way
You will save time


DIY
Pros
You save money by doing it yourself.
You get to enjoy  the experience firsthand of buying a property
you earn a higher net margin or yield.

Cons
You have to make sure that you do your due diligence right as there is no back ups.
You might get advantage of as you are from overseas
You need time and money to get to the States.

Did you know......?

• That lenders usually require PMI (private mortgage insurance) only when the buyer is putting down less than 20% of the home’s purchase price?
• That closing costs are negotiable and can vary by bank and lender?
• While practising your due diligence you should always review the title of the property? (Certificates of titles are public documents which people can review and look into)
• you should always  check for environmental hazards such us gas or water leaks?
• Is expected the further lower prices throughout the US as the recovery in the property market stills seems some way off. 
• The US is now the 2nd most popular place for overseas investors to buy property?
• The US its one of the only 3 countries that taxes its residents on world holdings?

Us cities with the most underwater mortgages:

 Some of the cities with the most underwater mortgages are:
Las Vegas, Phoenix, Modesto, Jacksonville, Tampa, Vallejo, Stockholm.

More about: Doing your due dilligence

Talk to renters as well as homeowners in the neighborhood. You will find that renters can be more will  honest about the negative aspects of the area because they have no investment in it. If you know exactly what  neighborhood, try to visit it at different times on different days of the week to see your future neighbors in action.

Generally speaking if you are a beginner in the  investment property field then the best  is a residential, single-family dwelling or a condominium. Condos are low maintenance because the condo association is there to help with many of the external repairs, leaving you to worry about the interior.

One positive side about single-family homes is that they tend to attract longer-term renters in the form of families or couples. 

One of the reasons why families, or couples, are generally better tenant than one person is is that they are more likely to have a stable finance and pay the rent on time. As a landlord you want to attract this type of demographic.

When you have decided on  the neighborhood, then look for a property that has appreciation   potential and a good projected cash flow.. Look around for properties that are more expensive than you can afford no only the one withing your budget as the real estate agent can often sell below its listing price.

For appreciation potential, you are looking for a property that, with some light renovations, will attract tenants who are willing to pay out higher rents. This will help you to get more for the house if you decide to  sell in the future.. As far as cash flow you to have to make an informed guess. Take the average rent for the suburb you choose and subtract your expected monthly mortgage payment, property taxes (divided by 12 months), insurance costs (also divided by 12) and a good allowance for maintenance. It s very important not to underestimate the cost of these last or you will pay for it once the deal is done. If all these figures come out even or, better yet, with a little left over, then you know its a good buy.

You will find that in every state you have has good and bad cities, every city has good  and bad neighborhoods and even every neighborhood has good  and not so good properties, but it takes a lot of time and research to line up all three. When you do find your ideal rental property, keep your expectations realistic and make sure that you have a clear idea of what you can afford and what your goals are.