Choosing the right investment properties is key, and will largely determine whether you have positive cash flow and built-in equity from a house. Here are some tips to finding a deal that will become a great investment for years to come.
The Money Is Made When You Buy
They say the money is made when you buy, and that is very true when it comes to real estate. It’s hard to make good money from a bad deal, while at the same time it’s almost a no-brainer to make money from a good deal. Spending the most time determining which house to buy will pay dividends later because you’ll avoid the duds and only go with the winners.
Light Fixer Upper
Some of the best houses to buy for investment properties are the ones that need some work, but not that much. Houses with outdated kitchens and bathrooms are great candidates because you’ll be able to quickly gut these and make them look beautiful. It’s common knowledge that these are the first two places people look when they’re checking out a rental.
Strong Rental Potential
Look for areas that will be easy to find renters for your investment property. The longer you have to float the mortgage payments the longer it will take to make the unit profitable. Ask your local realtors who specialize in rental properties whether or not the rental market is favorable for real estate investors.
Good School Zone
Find a house that needs a little work in a place that has good schools. This will attract young families that want to make sure they’re providing a good education experience for their child or children. They will usually want to stay there for multiple years, so you’ll avoid having to find a new renter every year.
Neighborhood Revitalization Programs
One of the best places to buy an investment property is a neighborhood that is experiencing a revitalization period. This means that the local community is on board with turning things around and making things better for everyone in the area. There may be government-based programs either on a federal or local level that you can use to improve the home, and it can often lead to rising home values.
If you’re feeling extra ambitious you can help start a revitalization program with a grassroots effort. Not only will you be establishing yourself as a magnanimous investor that wants the best for everyone, you’ll be getting in on the ground floor of a neighborhood that is on the rise.
Trust Your Gut
Never rush into a purchase when you’re trying to find an investment property. Potential deals are always entering the market, so you should never feel like you are missing out on “The One”. Do a gut check and trust your intuition, if it doesn’t feel right don’t do it, even if everyone around you is telling you it’s a good deal.
Trust that you’ll find the perfect investment property for your business at this particular time. Set clear criteria that you want the house to have, and never settle for something that doesn’t tick all the boxes.