Tips On Buying A Profitable Investment Property

Although you have to consider essentially the same factors, buying a home for investment purposes is still different from purchasing a home for settlement; you have to pay closer attention to present factors that can influence future prices and you also need to consider other expenses that can offset or reduce your earnings later on. Experts in the real estate market offer the following tips to help prospective investors find a truly profitable piece of property:

Do your research. If you are a first-time investor, it would pay to study the market as well as the risks and benefits of investing in properties. Be sure to brush up on the basics, such as the various factors that affect property prices and how these cause prices to rise or drop. Also pay attention to trends and news on the market and understand how these can influence the market. It’s really important to become familiar with the ins and outs of the real estate business before buying investment properties as thorough preparation is one really good way to ensure success in the business.

Choose properties in a promising area. If you have done your research right; you will eventually come across “promising” areas where you can buy properties that will yield great profits. Promising does not necessarily translate to upscale properties that fetch high sale or rental prices, or cheap investments that allow you to return your investment quickly. A promising location is one that offers special features that are truly attractive to tenants. These features include schools for families, entertainment hubs for young professionals, or low-cost housing for college students. These promising features may differ with each type of tenant, and as such, you will have to…

Consider the type of tenants in the area. It may be tempting to choose a piece of properties based on what you would want yourself, but it’s best to think of what your target tenants would like instead. When choosing properties, ask yourself what features your tenants would like or need. For instance, if you are catering to the college crowd, easy access to amenities, such as Laundromats, grocery stores or coffee shops may be important. If you plan on having families or young professionals as tenants, the property features you need to prioritize will change accordingly.

Take into account future expenses. As an investor, you need to carefully consider the expenses that will later on influence how much you earn from your investment. These include expenses for home repairs or renovations to make the house attractive to tenants and the property taxes along with any applicable condo fees you will have to pay for on a regular basis. Make sure to include all these into your cost calculations to ensure that you will be able to afford purchasing the property and eventually earn back your initial investment.

18/12/12 09:19AM David Brown

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.