DALLAS, May 25, 2012 /PRNewswire/ -- Experts say low home prices combined with low interest rates make this the best time in years to become a real-estate investor. While the timing might be right, investors need to understand all the costs involved in a rental property investment. Unplanned expenses can easily turn what looks like a good deal into a cash drain for years.
"Although there's never been a better time to invest in single family homes for rental properties," said David Hicks, co-president of HomeVestors of America, Inc., also known as the "We Buy Ugly Houses®" company. "The novice investor that jumps into a property unprepared can easily have a very expensive education. There are a number of factors to consider."
"First of all, a real estate investor needs to know his or her market," said Hicks, whose company has purchased over 50,000 homes since 1996 and is the largest home buyer in America. "First-time real estate investors should know the answers to questions such as: What types of homes are good investments? Is there a market for rental properties in the neighborhood for this house? What is the average vacancy rate for homes in this area?"
Investors also need to thoroughly understand what size of investment they will need to make in order to get a property in good condition to rent it.
"If the home has been damaged by the previous occupants or is in a state of disrepair, the cost to bring it up to neighborhood standards has got to be factored into the purchase price," Hicks said. "Otherwise it may not be able to generate the amount of rental income you will need to make the investment pay off. Also, don't forget to factor in ongoing repairs and vacancy."
HomeVestors works with real estate investors in a number of ways, explained Hicks. "We have houses that are rental ready investments and properties that are not yet repaired for the investor who wants to invest some "sweat equity" in the property."
"Many of HomeVestors independently owned and operated franchises purchase more houses than they have time to rehab," Hicks added. "That's why we sell so many houses to investors looking for fixer-upper homes which they can repair, renovate and update themselves."
HomeVestors also has rental ready homes available as well. "These homes can provide a fast and easy way for an investor to quickly build an inventory of rental properties," said Hicks.
"We think this is the best opportunity for investors to build a rental portfolio in the last 30 years, and we're seeing a surge in activity from our franchisees," he noted. "Now is the time to take advantage of a market that only a few years ago did not offer the opportunity to acquire cash flowing rentals."
About HomeVestors of America, Inc.
Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties. Most commonly known as the "We Buy Ugly Houses®" company, HomeVestors strives to make a positive impact in each community. In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review's "Top 50 Franchises," a distinction awarded to franchisors with the highest level of franchisee satisfaction. For more information, visit www.HomeVestors.com.
CONTACT: Susie Lomelino