What to Look for in an Investment Property
Thinking about investing in real estate? If you are a first-time investor, you might find that the entire process can be quite daunting, especially when it is time for you to choose the property to buy.
While it can be helpful to have a real estate agent help you to complete the purchase, it’s wise to start looking for a property on your own as well. Sometimes, an agent can put extra pressure on you to make a purchase even if you are not a hundred percent sure about the property. Therefore, it is important that you are able to make an unbiased opinion of all the properties and neighborhoods that you believe are within your budget and other important factors.
Let’s check out some of the most important things to look for in an investment property.
The Kind of Neighborhood
Before you go looking at properties, it’s wiser to first decide on the neighborhood where you want to buy a house. Why is that important? First of all, it will influence if not dictate the types of tenants that you’ll get as well as your rental price and vacancy rate. For example, buying a property in a university area means that your potential tenants will mostly be students or university professors. If you rent out to students, it’s highly probable that you’ll face vacancies during summer.
Proximity to Schools
If you are considering investing in a family-sized home, then you should also assess the educational facilities in the area and how close they are to the property. Take note that even if your property looks good, if there are no good schools around, the value of your investment may be affected. You may be more concerned about the cash flow that you’ll get monthly, but should you decide to resell, the overall value of the property will be very important.
Amenities in the Area
You should also not forget to look around and see what the neighborhood offers in terms of amenities. Are there restaurants around? How about a gym or a grocery? What other perks are there? Areas with better amenities, both public and private, attract more tenants, too.
Job Opportunities Nearby
As an investor, you want to make sure that your property will attract the right kind of tenants. One way to ensure that is by choosing a rental property that is in an area with growing employment opportunities.
The Physical Aspect of the Property
Generally, the best investment property, if you are just starting out, is either a condominium or a single-family dwelling. As much as possible go for a property that wouldn’t need much maintenance and is likely to attract long-term renters. This is a property that is likely to fetch a higher rent, too.
You don’t have to wait for a real estate agent to present you with options for your first investment property. It takes a lot of work and patience but doing the research yourself does have its benefits. And as long as you know what you should look for, then you have a really great chance of finding a property that will prove to be an excellent investment.
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