It's surprising how much time many people will spend on searching and buying a new car and how little time they will spend on seeking out and buying a property for investment purposes. This seems to be true for many, despite the fact that an investment property can result in 20 to 30 times more value than the car! With this impressive statistic in mind, it's important to take your time in developing a quality property portfolio. There are many steps that need to be taken when you consider adding a new property to your property portfolio. Missing one of these critical steps could negatively affect your portfolio's financial success.
Step One: Planning and Research Stage
- Learn about and determine what types of investments you will have in your portfolio (e.g. - raw land, residential, commercial).
- Get as much information as possible about the city where your property is located. Look for government websites that provide current data.
- Take a real estate course. There are many available online. If you are building a portfolio, having a basic knowledge of real estate procedures will be a tremendous asset as you move frequently through negotiating and buying stages.
- Identify a local realtor, property investor, or developer to work with.
Step Two: Identifying Property Needs
- Review data on growth and economic stability to finalize location.
- Also look at data on criminal activity. If data isn't available, go talk with the local police department rather than rely on the seller.
- Find out about property taxes and if the property is in a disaster zone. Both of these can certainly impact finances.
- Have a professional inspector assess any potential property.
Step Three: Reviewing Finances
- Meet with a mortgage broker or bank to determine how you will finance the property. Know your credit history going in.
- Ensure that the property you want to acquire has a positive cash flow history by examining the financials.
- Compare those financials to your potential investment expenses (e.g. - maintenace, legal fee, accounting, etc.).
- Hire a property manager. There are so many benefits to having a property management company. These professionals can oversee the property for you and protect your investment.
Gassen is a professional property management company based in Minnesota that can help you oversee your real estate investments. You've invested time, money and energy into your property purchases, and now you must protect them. The team at Gassen can help you do just that. The company is Minnesota-based and comprised of staff members who hold high industry level certifications. Gassen professionals can provide services in real estate and rental properties, home owner's association management, online services and accounting services. Contact Gassen today to talk with a highly qualified representative about how these services can benefit your properties.