If you’re looking at real estate investment opportunities in Hampton Roads, Virginia, it’s important to know beforehand what will be a dealbreaker for your investment property.
One of the worst things you can do in the realm of real estate is settle on an investment property that isn’t totally up to your standards - having a checklist ahead of time will both set you up for success and keep you from sacrificing a cent on your bottom line.
When you’re prospecting for houses in Hampton Roads, it’s important to avoid neighborhoods that are already saturated by developers, or where all of the most lucrative opportunities have been spoken for.
Luckily, Hampton Roads is anything but picked over - for those who know where to look, there are a huge number of rapidly-improving neighborhoods with high potential for a profitable investment.
For instance, while Virginia Beach may seem like a developed center with little room left for investors, this couldn’t be further from the truth. A robust pedestrian infrastructure, steady home values, and a huge amount of annual tourist traffic make it an ideal place for an investment property, and there are still deals to be had. WalletHub even named Virginia Beach the #22 city in the country for fix and flip investing.
Never underestimate the importance of the neighborhood’s overall desirability - doing so could have a hugely negative impact on your bottom line.
No Clear Path to Profit
Once you’ve found a Hampton Roads property that meets your basic criteria, it’s important to confirm that there is a clear path to profit on the investment.
A common mistake of first-time real estate investors is looking for the perfect property. In reality, most investment properties are being sold at a low price for a good reason - oftentimes, they’re distressed, they’ve been foreclosed, or they’re just in a general state of neglect. These are the properties with the best potential, especially for fix and flip investors, as the low price presents a clear opportunity for profit.
Whatever the circumstances, it can be helpful to have an anticipated profit margin in mind before you commit to any real estate investment. Once you’ve found a property you’re interested in, you can crunch the numbers and make an informed decision as to whether or not it’s right for you.
Plan Before You Purchase
Lastly, before you buy a house in Hampton Roads, you need to have well-informed and well-thought-out business plan.
An easy mistake to make in real estate is heading into an investment opportunity without doing the necessary research and planning beforehand. To adequately prepare, investors should (at the very least):
- Have well-reviewed contractors lined up for the job;
- Build an accurate timeline of the entire project, with allowances for any issues that may arise (contractors can often help with this);
- Budget out the total expected cost of the project, which may include: renovation costs, realtor fees, cost of permits, taxes, insurance, attorney fees, and more;
- Identify a hard money lender with local experience, one who can not only finance the project, but also give actionable and informed advice on how to maximize profit.
Most of all, proper preparation takes patience - successful investors never rush into a project, but take the time and effort required to put together a plan that will work.
If you’re interested in learning a little more about getting involved real estate investment, check out our free ebook, Building Your Real Estate Empire: Borrower Basics 101.