What Should I Do To Create A Turn Key Investment Property?

So what do you need to do to create a turn key investment property

? I personally do not like headaches and one of the best ways to invest in real estate if you don't like them either is to purchase beautiful properties in beautiful areas. I have followed this formula for several years and my batting average stays just as high as some of the best baseball players in the world.

One of the biggest parts of the Rent to Own process is purchasing the investment property. The first step is for us to evaluate the market and find properties that meet our investment criteria - - mechanical systems (furnace, air conditioning, roof, windows) as close to new as possible, excellent interior finishes, priced at market value and most importantly, with the ability to cash flow. Essentially, these are properties with the "wow factor" that will have tenants lining up and willing to pay a premium. Price for your home.

Once you have located your beautiful home on a child friendly street, it's time to submit an offer to purchase. The objective is to get a good deal, but more importantly, not to let deals that will yield great returns slip through your fingers for a few thousand dollars.

The properties I always recommend to new investors are desirable entry level homes, these are generally higher in demand. There will always be a new family starting out that needs a starter home. Try to remember when you purchased your first property and how and where you first started out. It goes back to our mantra of "beautiful homes in beautiful neighbourhoods". Generally, these properties will sell very quickly and for an amount within 1% to 2% of the asking price.

To avoid disappointment and frustration, it's important to have realistic expectations when it comes to making an offer to purchase. Expecting to purchase a turn-key property of this calibre for 8% to 10% below asking price can be difficult and could cost you thousands of dollars in the long run.

When you stop to break down the numbers, the difference a few thousand dollars off the price has on monthly cash flow is negligible. For example, the mortgage on $258,000 will carry for $995 per month. The same mortgage on $253,000 will carry for $976 per month (current interest rates).

The difference is less than 65 cents a day! For the cost of a half cup of coffee are you willing to give up a return on investment of 30% to 50% or more?

So, do not get caught up on trying to get the best deal, stay focused on trying to get lots of good deals.

by: Gary Hibbert

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