Poll: New Year's Eve 2013What are your plans for?
Buy low, sell high. Anyone in any market aims for that, but few succeed. The only reasonable conclusion is it's easier said than done. So, to be part of that group of 'we happy few', consider some of these ways to maximize your return.
In any business deal there are essentially only two ways to achieve the highest profit — keep your costs as low as possible, and attract the highest bidders.
To keep costs low going in, do as much yourself as possible. Two areas to start on are inspections and repairs.
Acquire the skills, and even licensing, needed to perform professional level inspections. Professional inspectors get up to several hundred dollars for a thorough review and detailed report. And they earn it. A good inspection can save you thousands in the form of foregoing falsely attractive deals and providing negotiating bargaining chips.
After the purchase, carry out any repairs needed yourself — to the extent you can do professional level work. Be thrifty, but not foolish. Amateur repairs lead to larger costs down the line. Shop around for low-cost quality roofing materials and superior carpet deals. When you can't do the work yourself, seek out skilled handymen from small outfits. Companies whose prices include overhead for bonding of employees eat into your profits.
Shop around for low-cost loans with lesser known lenders. Major banks and mortgage companies tend to have higher fees and less than competitive rates. Never pay anyone an 'application fee'. Perform the same exercise with respect to title and insurance. You're not required to use anyone the lender recommends.
Once you've selected them, don't passively accept unnecessary fees with ridiculous prices. In today's world it's absurd to pay $50 to deliver a few dozen papers across town, but tacking on charges like that is common practice. Take your time looking for property, lenders, title companies, insurance brokers, agents, etc. Shop as carefully as you would for a new car — no more so, you're investing much more.
Educate yourself about real estate law and basic accounting. Professionals in those areas charge large fees — and earn them. Good advice costs heavily for a good reason. These professionals can save you thousands by avoiding costly mistakes. But you can perform many of those services yourself if you're willing to study. You don't need a law or accounting degree, just an active mind and a lot of patience for detail.
When you've found an attractive property, negotiate firmly but in good faith. Be willing to state clearly what you want and prepare to compromise. Individuals who feel they've been burned often find ways to sabotage your profits in ways you discover only later.
When you're on the selling side, perform the same thorough shopping process and negotiate agent percentages, closing costs, and other high-ticket items.
Prepare the property for sale at the maximum price by investing in a few flowers and having the property thoroughly cleaned. Leave the lights on even during the day. Put on some "mood music" at a low volume; put out some attractive flyers with photos and little snacks for visitors.
Market your property heavily to get a large pool of interested buyers. Competitive bidding always benefits the seller. Be willing to take your time during the process. He who is most eager, makes less.
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