How to pick the perfect investment property in 3 steps
Image by Nattanan Kanchanaprat from Pixabay
Investing is something that everyone should be doing if they want to build wealth. It has some risk, but the potential for growth is also there. Despite that potential, only a little more than half of all Westerners are investing their money.
When it comes to investing, there are several different types that you can choose from. One of the most popular and potentially lucrative is property investing. However, property investing isn’t always the easiest thing to do. Thankfully, if you follow a few simple steps, it can get you well on the way to picking the perfect property.
With that in mind, this blog post is going to go over three steps to help you pick the perfect investment property.
Crunch the numbers
Image by William Iven from Pixabay
Next up, you need to crunch the numbers. Remember, this property is an investment so you want to make sure you are able to make more than you spend. Crunching the numbers often begins with knowing how much you are able to spend. This could depend on how much you have, or how large of a loan you are able to secure.
Once you know how much you can reasonably borrow or spend, it can make it easier to measure out just how much your loan payments are over the years. Also, don’t forget to look at your expenses. This could include the cost of fixing the home, utilities and maintenance, property management, taxes, and several others.
Lastly, think about how much you want to/can charge for rent or what you should sell the home for. These numbers will vary depending on the quality of the home, but also the neighborhood and what similar homes are renting or selling for. Being able to accurately estimate your earning is crucial towards the success or failure of your investment.
Decide where and what to buy
Once your goals have been decided on and the numbers have been crunched, you can finally decide where you want to buy. This not only means choosing the right house (new or old one) or neighborhood, but also the right city. When deciding, you need to think about costs, crime, the weather, and the nearby amenities to attract potential renters and buyers. This process can take a while as you try to find the right place to meet your goals and needs.
Generally, you should choose an area that has potential but is still within your price range. Once you buy, it is a good idea to become an expert in the area. People will feel more comfortable buying or renting from someone with a lot of knowledge. You should familiarize yourself with the fun things to do in the area, but also things like average utility costs and traffic patterns. While energy rates should be straight-forward in many cases, doing your own research is still a good idea. The more you know about an area, the better you can tailor the property to the tastes of those looking to live there.
In conclusion, hopefully, the information, tips, and steps in this article have been able to assist you in choosing the perfect investment property.
