If you’ve been following real estate trends lately, you know that San Francisco is one of the hottest markets in the country. Investing in property here can be a fantastic financial opportunity for the first time flipper or the certified real estate mogul.
If you’re thinking about investing in real estate opportunities in San Francisco, check out my tips for what to look for in a property.
Don’t Fall for Fixer-Uppers
While you may think you’re handy enough to fix up a property to its full potential, err on the side of caution and assume you’re not. If you’ve ever watched HGTV, you should know that even modest repairs can balloon out of proportion and can quickly drain a budget.
While your vision may be grand, it’s best to stick with homes that just need cosmetic repairs. If paint, caulk, or tile can’t fix it, stay away.
Think Small
If you’re a first time investor, it’s best to stay with a small vision.
Apart from sticking with small renovations, consider smaller properties. Starting with a single family home, or a single building split into tenants can be a great way to dip your toes into the flipping experience. As you gain more knowledge about your flipping abilities, you can start purchasing larger and more work-intensive properties.
Consider Less Popular Neighborhoods
The idea behind purchasing any investment property is to either sell it for more than you invested into the property, or create a long term cash flow by renting it out. In either case, it may benefit you to look in neighborhoods surrounding destination areas, rather than already popular properties.
The market value in surrounding neighborhoods will be considerably less than in highly competitive markets, meaning you’re more likely to get a better deal. Also, as the city expands, these surrounding areas will eventually be just as coveted, meaning you can sell for more, or charge more rent.
Be Aware of Property Taxes
If you’re planning on buying a property for flipping or renting purposes, be careful to calculate property taxes into the budget!
If the property was previously residential, the original owners may have had a homestead exemption on their taxes, which will sharply increase when you purchase the property. This is not a deal breaker if you have your heart set on the listing, just make sure to plan properly.
Prepare for the Worst
Speaking on planning, when calculating a budget, it’s always best to plan for the absolute worst case scenario. While it may not be fun, a realistic budget can save you much heartache and frustration down the road.
Make sure you do your due diligence on the property and look into the necessary insurances to preserve your hard work and investment!.
Ready to Invest in San Francisco?
As your local real estate expert, I’m happy to provide you with not only my local expertise, but all of my resources. Let me connect you with my vast network of real estate experts to find the perfect investment home for you.
Need more information? Read more about my tips on San Francisco investment properties and property management, or contact me today — I’m happy to answer your questions!