I'm young! Where should I buy?

[boatboy]

I am 20 years old and plan on purchasing my first investment property this summer? I think I will either buy a double or just small house that I can rent out. Any suggestions on where I should lean between the both? I will be buying west of Cleveland. Is it the time to buy? Anything I should look for or any advice from your pro's.

Thanks!

[Phoenix Real Estate Agent]

Buying a Duplex is a great way to get into real estate. A couple of things to consider:


Don't skimp on doing a background check on renters
Make sure you don't mind being a landlord
Don't purchase a property which is in poor condition...
Make sure you can afford not having a renter for 3-6 monthsHope this helps.

[Jennifer Allan]

I agree, duplexes are great and in some markets can be split into townhouses for big profits down the line. Buy in a good area - one that you are comfortable in. Being a slumlord is no fun at all!

I'm currently writing a book called Rent with Soul, The Amateur Landlord's Guide to Getting and Keeping Fabulous Tenants, so if you'd like any advice from a Soulful Landlord (that would be me), just ask!

Jennifer

[BryceB]

It's always the right time to buy if you find the right investment. Just take a hard look at the how the property will really operate. A whole lot of new investors don't think about all of the expenses involved, and so they buy into properties that just lose money.

[CSmith]

I’d have a couple of pieces of advice for a new investor:

1) Run the numbers. This is something that will take a little bit of initiative and that you’ll have to do yourself. Your realtor is unlikely to be able to help you here – whether it’s a good investment or not he/she will get a commission once you pull the trigger, so this isn’t the person to go to for advice. You’ll have to consider insurance, repairs, vacancies, rental rates, property appreciation, taxes, utilities, fees, commissions and a myriad of other items. You can work this out on your own with a spreadsheet, or use a service like the one my company offers at equityscout.com. Either way works – as long as you do it.

2) A fixer-upper might be right. I’m being presumptuous here, but I’ll take a leap of faith an assume that at 20 years old you are long on enthusiasm-time-muscle and relatively short on cash. Don’t overestimate your ability to complete major projects (or underestimate what they will cost) but buying a project and fixing it up might be the way for you to go. You’re not going to get a massive discount unless you buy a disaster – which probably isn’t the right approach for your first investment – but getting into a property that needs a little TLC will teach you a lot about the real estate process.

3) Live in it. If you’re renting, the best investment you can make is a house that you’re going to live in (assuming you can afford it and you’re planning on staying in the area for at least five years). As suggested, a duplex might be a good way to go if you want a renter to cover some of the bills.

4) Watch out for the “gurus.” If you’re paying hundreds or thousands of dollars on courses you’ll be making someone rich – but it won’t be you. Most of these are thinly veiled motivational seminars, so look at them with a skeptical eye before you whip out your checkbook.

Good luck!


Christopher Smith
Managing Director
EquityScout.com

[whytehouse]

Everything down there is being discounted and as well all know what goes down must eventually come up... Don't think you'd ever have a problem with vacancy in Florida with baby boomers and vacations demanding.. Great time to get in the vaction market really cheap... they're averaging 8% in FL

[Business_with_Greg]

Cleveland, Ohio?


If so I would have to know exactly where to help. Cleveland as a whole is depriciating at about 5% annually.

2 unit is a great idea. You could even occupy 1 side to likely eliminate a housing expense for yourself while you do this. That would help you save money up for assets.

I think Akron would be a better area. Or for just a cash flow rental look at Youngstown. Depriciating but the best house on the block is usually 30k.

[Codythebest]

Florida has increased in value by 100% in 4 years or so. So high that property taxes, insurance and price have reached the sky. So now, nobody can afford that. What happen? no more buyers and sellers offering free cruise if you buy their home.
Wait a couple of years, when price will decreased strongly there, then go ahead for a oceanfront condo with owner financing and zero down.
First line never lose....

[Codythebest]

That state is the hillbilly state for other. So prices are very low if you compare with other states. You always have people cashing out the 900K from their San Francisco studio and buying a 5bed/4.5ba pool for 400k in TN.
So TN properties will go up...

[whytehouse]

If I had the luxury of buying a 2BR 2BA for 300K on the SW gulf Coast and having every extremity associated with a condo paid up for 2 years would that be good