What To Look For When Selecting An Investment Property;
Real estate has given the world a large number of rich people, so there are several reasons to consider property as a potential investment opportunity.
Moreover, just like any investment, it’s better to be all informed before you dive into it with all your hard-earned money.
Gear yourself with the information below before you start looking for an investment property.
A Tempting Location
The reason why everyone emphasizes “LOCATION” is because it’s quite important. A beautiful location is key to get a good ROI.
It plays a significant role in the amount for the rent you ask for, the quality of renters you get and the vacancy rate you will be experiencing.
A good neighborhood with plenty of facilities is your best gamble when you are asking for high rent.
Good schools, public transport, restaurants, parks, shopping centers, medical centers, a potential job market, and libraries are just some of the things that will increase the overall value of the property and attract prospective renters.
Safety is another important element that adds value to property investment.
Do proper research before investing in land, know about the crime rate in that area and vandalism.
You will also want to ask whether those numbers are increasing or decreasing to get an overall picture in the long-run.
Get the Down Payment
Investment properties have a larger down payment requirement as compared to the owner-occupied properties, so they have strict approval requirements.
The 5% you have invested in the home you are currently living in isn’t going to serve as an investment property.
You will require at least 20%, along with the mortgage insurance that will be paid on the properties.
Some investment property takes a huge part of your time to look into the maintenance, like student rentals and vacation rentals.
Properties in low-quality areas that aren’t in the right shape also have a higher income rate and need more upkeep.
The low-maintenance properties are the ones that attract long-term and stable renters. These are not flashy property investments but are definitely one of those that are strong and steady in the long-term.
The Potential to Grow
A sensible investment is one that appreciates in value, as an investor, growth works on a two-level stage:
the first stage is when to invest in property and the second is when to sell it. When you buy a property, look into the growth potential that you can get from doing some cosmetic updates.
How much more will you be able to charge after the new paint, and compare it with the previous value?
You will get a potential return on investment if you are willing to put a little extra work in the property after you purchase it.
What To Look For When Selecting An Investment Property