Make these 5 smart choices upfront when buying investment property
Before deciding to invest in property, one must set some priorities straight. Diversifying your portfolio is easier said than done. Fortunately, with the right guidelines you can do this without taking any foolish risks. First-time investors must get informed; owning a property is challenging, especially if you want to make it an investment – sell, flip, or rent. Here are 5 guidelines to help you buy property and make the most of an initial investment.
1. Research is gold
Even though you may be tempted to work with a realtor to help you buy a property, we advise you to perform a research on your own. An agent often brings unnecessary pressure, not to mention that some might even try to convince you to make wrong choices. It is important to be objective; don’t just buy a property just because it looks good on the outside. Some things to consider before spending any money:
• Check the neighborhood and make sure it has parks, schools, low crime rate, shops and drug stores nearby
• Assess the neighborhood’s job market
• Keep an eye on rent rates and future developments
2. Property appreciation
Newbie investors are advised to invest in residential property. Condos and single-family dwellings are the best because they feature low maintenance as far as external and interior repairs are concerned. Since condos are not independent living spaces, the rent is usually low; you might want to keep that in mind as well. Single-family homes on the other hand, have more potential. Lenders are more responsible and they won’t move out any time soon. Families in general, look for places to rent long-term. They want to make a place feel like a home, which basically means they’ll take more care of it. After you’ve decided on a neighborhood, it might be a good idea to assess appreciation potential. This will help you break down your cash flow.
3. Hire a competent property manager
When investing in property, it might also be a good idea to hire a property manager. Go with a licensed realtor to make sure you’re making all the right calls. A professional in the field can help you manage tenants, and it can also offer ongoing advice when it comes to making decisions. A skilled agent knows which tenants are a good fit for your property; he will conduct reference checks as well to be sure tenants pay their monthly rent on time.
4. Understand the dynamics of the real estate market
The more you know about the real estate market the higher chances you have to reap benefits. Before getting started, check other property listings in the area and consult with as many realtors as possible. They’ll help you which areas exactly have the biggest potential. A good idea might be to access information from unbiased sources, like RP Data. It will help know more about property values, average rents, suburb reports and demographics in your chosen neighborhood. When it comes to investing in real estate, never forget that the internet is packed with valuable sources. You just have to learn where and what to look for. Keep an eye on upcoming changes and developments in the area. For example, a new mall or school near the place you’d like to invest can boost the price of your property tremendously sometime in the future.
5. Make your property appealing to potential renters/buyers
Nobody likes to buy a property that doesn’t look good. It might feature the best interiors, but it doesn’t draw their attention immediately, they’ll walk away. A presentable property – whether a house or a condo – makes potential buyers picture themselves live there. Deal with interior fixtures: make sure all appliances are in check and manage any leaks, clean the kitchen and the bathroom (remove mold and humidity), and repaint the walls. People don’t want to walk into a house that smells bad. It might be a good idea to spare some cash on a few plants, even a new rug. On the outside, it is important to clean the patio. Give it a fresh vibe: install a swing, some candles, even a new entrance rug. Believe it or not, when selling/renting property sometimes the smallest details make the biggest impact.
By Fredrick Cameron and PropertyTurkey.com!