ver the past few years,
real estate investors, Surprise # 1 - 'These (extra)
hungry for break-even or costs are the norm in this
positive cash flow rental state!'
properties, purchased income
properties out of state. Besides extra closing costs like
California investors bought pricey surveys, common in Florida
houses in Florida, Texas, and but rare in California, other
Oklahoma. Florida investors surprise costs included higher
purchased houses in Louisiana. transfer fees and taxes. Property
Texas investors purchased in Las taxes in Florida cost much more
Vegas. Many of these investors for investors in Florida than in
made millions of dollars because California. On the other side of
of the appreciation in hot the country, out-of-state
markets. investors were shocked by
California's state tax held in
On the other hand, in 2005, some escrow: 3.8% of the property's
beginning investors lost their SALES price, no matter the actual
hard-earned investment capital or profit made. In other words, an
only made a meager profit because investor who made a quick profit
they failed to do their of $20,000 on a fast flip could
homework on the out-of-state have more than the profit held
area's real estate market and until the next year's income tax
customs. filing.
If you 're thinking about buying Surprise # 2 - 'You can't
investment properties in a lease this property!'
different state than you're
accustomed to, beware of these New home developers and many
five surprises. Homeowners' Associations (HOA)s
prohibit property owners from instead of reaping promised
leasing their properties. Some of profits.
these restrictions got passed,
without the investor being Surprise # 4 - 'You can't sell
notified, during the property this house, now!'
purchase phase. You must read the
fine print to see if any clauses Some investors who couldn't rent
prevent the rental of the the out-of-state property decided
property. Home builders, to keep to sell because the values did
the value of the neighborhood up, rise significantly while the
added restrictions requiring the house was built or during the
purchaser to occupy the home as a purchase time. However, many
primary or secondary residence. investors were stunned when they
were told they couldn't sell the
Surprise # 3 - 'This house property within the first year
will only rent for $750 per after purchase. Restrictions
month, not $1200!' prohibiting real estate investors
from quick-turning their
This was one of the top mistakes properties is a trend that is
made in 2005. Large real estate growing increasingly popular with
investing groups, selling some developers.
out-of-state properties to local
investors, inflated the rental Surprise # 5 - 'Houses don't
income. Because so many houses appreciate 30% per year
were purchased in a limited area here!'
by investors, a rental glut
lowered the expected income. This Perhaps you've attended or been
created hardships for investors invited to a high-power
who suddenly had to pay out investment seminar that promotes
hundreds of dollars a month out-of-state real estate
investing. Some of these Don't make the costly mistake of
'investor clubs' really are not fully researching the
promoters who receive kick-backs complete market customs and
in real estate commissions, restrictions in the area where
property management fees, you're thinking about investing.
mortgage loan fees, and even fire If you can't afford to go check
insurance premiums. They tell out the area in person, choose
stories of huge appreciation another area that you can visit.
gains, which are probably true.
However, not all areas enjoy
significant appreciation--year Copyright "© 2006 Jeanette J.
after year. Fisher
About the Author:
Jeanette Fisher offers FREE "How to Start Real Estate Investing Teleseminar," free ebook, "The Truth about Making Money Flipping Houses" http://doghousetodollhouse.com
Source: www.isnare.com
