What to Look for in an Investment Property
Investing in property is a great decision. You stand the chance to get high returns in rental income, appreciation and tax benefits. As much as investing in property is beneficial, it is not a guaranteed success. You still need to put in efforts to ensure the investment pays off. The first effort you need to put in is finding the right property to invest in. Invest in a property that is not worthwhile and it may cause you losses. On the other hand, an investment in a perfect property may just be your answer to financial freedom. How can you know that an investment property is perfect? Here are some things to look for.
Many real estate investors will tell you that location is everything. If you are looking at property for rental purposes, this becomes the number one consideration. After all, not many people will want to rent a house far away from amenities and infrastructure. Look at the proximity of the property to public transport, schools, hospitals, towns and shopping centres and so on.
The location will determine the property’s vacancy rates. A strategically located property will attract renters and it will not be vacant for long periods. When considering the location, bear the purpose of the property in mind. For instance, while condos need to be near business districts, vacation homes need to be at the places where people go for vacations like beaches.
The price of land will be determined by various factors and when it comes to investing in property, you should not always go for the cheapest. When looking at the price, do not just consider the initial cost. Also consider the maintenance and construction costs that will follow thereafter as well as the repairs and taxes that will be needed later. Compare this cost with the returns you stand to gain.
Different property sellers will accept different payment methods. While one will accept Home Loans, another will accept a mortgage while another will only accept cash. Find out what your options are and only purchase property that allows your preferred method of payment. Home Loans are perfect for people who want to invest in property with the aim of making them homes.
How much down payment do you need to make? Find out and opt for property with an affordable option. Get good Home Loans and you will get great payment terms from any property seller. Remember to ensure that you can afford the repayments.
What do you intend to do with your property? Will you build rental houses? Will these be commercial or residential? Perhaps you want to firm on the land or even just hold and sell later. No matter what the intended use of the land is, you need to calculate its profitability. Do cashflow analysis and see just how much you stand to gain.
Only invest in property that is potentially profitable. A good way to go about this is by the 1% rule. This states that the expected return on investment should be at least 1% after completion. If a property can stick to this, then it is a safe investment. If not, consider its long-term benefits and weigh your options carefully.