There is a lot to be said about low budget real estate. This is property that is often searched for by landlords and investors because of the income potential. A good piece of low budget real estate can bring you income in many ways.
Flipping
Low budget real estate is the perfect property for real estate flipping. It is generally a piece of real estate that is in need of repair and maintenance. These can be picked up at extremely reduced prices because of their poor condition. Once they are cleaned up and repaired, the buyer can then sell the property for a profit. When flipping these properties, you should do a fair amount of financial analysis to be sure you are not going to waste all of your profit potential on the repairs and improvements. If the property needs extensive repairs, you should probably skip it and move on to the next deal. You also need to take into consideration the time it takes to make repairs. Profitable flipping requires that you get the required repairs done in a timely manner to avoid paying unnecessary mortgage costs.
Wholesaling
Low budget real estate is a dream come true for real estate wholesalers. They can simply purchase that property at it’s reduced rate and add their cut to it before selling it to an investor. If you can find a piece of property that is cheap enough, you can sell these rather quickly. Often wholesalers will have a buyer lined up before even purchasing the property. This method can earn you a few thousand dollars profit in just a day or two. This is some of the easiest money you can make in real estate because you aren’t putting any work into the property. You simply buy buy the property or put it under contract and sell it as is.
Renting
Landlords have a special advantage with low budget real estate. You can get a really good deal on a rental house in need of repairs. The benefit of this is that any repairs you make can be written off on your taxes. This can create a unique situation where you can actually take a loss even if you made a profit from your renters. This often happens when you combine your depreciation, interest and expenses on your deductions. Depreciation is often the largest deduction that you can take because it includes the entire cost of the building plus any major repairs that you made for the previous years of ownership.
There are other more obvious benefits to buying low budget real estate as a rental property. One is that if you can get the property at a low enough cost, you can make a monthly profit from the rent. If the rent value is higher than your mortgage payment, you have cash flow each month. This is free money just for letting someone else pay your mortgage. Speaking about mortgages, another good thing about rental homes is the fact that your mortgage is not coming out of pocket as long as you have a tenant in the property.
Don’t hesitate to look at low budget real estate properties when seeking to invest. These can sometimes bring the highest profit margin.
