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Is it too late to invest in real estate in Arizona? |
In my opinion, it is never too late to invest in real estate in Arizona. The 'bubble' may apear to have burst in many areas, but people alsways need a place to live. Actually it is a great time for real estate in Arizona. For investors, now is the time to buy. It is a buyer's market. Sellers are getting worn out. They are tired of trying to sell!
With a few little known simple techniques, one can begin to invest in real estate even if you have a poor credit score, are self-employed or have only a small amount of cash to put down. I am not saying it is easy. I am not saying you will get rich with real estate overnight. I am saying it will take some work. It will take some planning. It will take some time to create income and possibly independent wealth with real estate in AZ. To my way of thinking, real estate is a commodity that is solid. It is not a fad item. It is a necessity like food and water. People always need a place to live.
One avenue for the new investor that can help you overcome hurdles like bad credit or little money is buying rental property. A misconception new investors often have is that having rental properties is a nightmare loaded with work. Not necessarily so.
If you fall into the category above, poor credit or only a small amount of cash a bank loan is not necessary. You can purchase a home with a lease option or lease purchase agreement , OWC (owner will carry), a wrap, agreement for sale or a subject to agreement.
Start out with a home that is structurally sound. Some of the more expensive repairs I would stay away from in the beginning are properties with bad roofs, bad flooring, un-repairable kitchen cabinets and counters, bad wiring, faulty furnaces and those homes in need of major plumbing repair. These are some of the most expensive things to replace or repair in a home.
If you are handy with general home repairs, you can often use sweat equity and do the repairs yourself. Cleaning is simple. Most any adult can figure out how to maneuver a paint brush and roller. Cutting weeds and mowing a lawn is work, but does not require a degree in rocket science. If you can't fix a leaky faucet you can buy a book, find instructions online or hire a plumber for about $65 per hour. (Beware as they often charge from the time they leave the shop until they return and finish writing up the work order.) For my way of thinking, the professional I call is the electrician, unless you have a husband like mine you can do most anything! In the beginning of your real estate venture, make it your assignment to give the property cub appeal… give it eye candy.
Leary about choosing a tenant? My first word of advice is learn to be a little bit 'people savvy'… listen to your gut and pay attention to those red flags. For instance, from my experience red flags fly when any prospective tenant that talks about the terrible previous landlords they have had or drones on about how they have had 'so many money problems or bad luck that were not their fault'. Chances are you will be the next landlord they will be talking about when they owe you rent.
Secondly, getting a credit report is helpful and many of the real estate gurus recommend it. It certainly doesn't hurt. Here are a few places you can recommend folks get get a copy of their credit report . We rarely get a credit report from prospective tenants. What we do demand in most cases is a reference from their past landlords and the supervisors with verification of the length of employment. Be careful on that too though. Once we have a phone call from a reference that was bogus. He was a buddy, not his supervisor. That tenant was one of our worst.
Many folks require a deposit and a first and last month's rent. We have never done that. We require a month's rent and a deposit of the same amount. If we allow pets, we charge $100 to $200 per pet. We also make all of our deposits refundable as long as terms of our rental agreement has been met.
This is just a brief look at how you can become the landlord instead of the tenant. This is intended to get your brain churning… to realize you can break down the false barriers that keep you from investing in real estate. Truly, there's more to it, but it can work, if you are willing to learn and willing to work!
of PrescottFSBO.com Jan 10, 2008
It may not be published without written permission |