If you’re new to property investing or simply want more information about making informed decisions about taking on new property, it’s important to be aware of the right approach to investment.
New property is alluring, but it takes a data-driven approach, attention to detail, and a certain amount of savvy to ensure that you’re getting the right property for your money.
Here are 6 great tips to property investment that will help ensure you make the right choices every step of the way.
Understand the Area You’re Buying In
Some property investors assume a lot about an area or a specific property.
Although it may sound time-consuming, getting up close and personal with the area you’re buying into is important.
That means walking around the immediate area of the property, and talking with neighbors and local businesses to see if people like living in the area.
Even just driving around to see where the closest schools, shops, public transportation, restaurants, and points of interest are can tell you a lot about whether it’s worth buying in a particular area.
You can take local research a step further and research the schools in the area, the unemployment rate, crime statistics, population figures and real estate taxes.
Much of this information is available online, from local government sources and from the huge range of real estate resources like City-Data.
Always Compare Properties
If you fail to compare property prices, you’ll likely end up paying too much.
Before you even speak with a real estate broker, you can perform a search in Zillow’s Recently Sold section showing you a list of sold properties and the prices they went for.
Try to search for similar properties to truly get an accurate estimate.
It will give you a good basis to start your investment property search.
Once you actually have a broker, ask to be shown more than one property based on your budget and investment property interests.
This will allow you to comparison shop and likely increase your chances of landing a property you want.
Do Hard Research
Public records from the registry of deeds are your friend, and are often available online.
You can find mortgage information and the last sale price of your target property, and determine if there are any liens or other financial issues.
This will give you a solid idea of what price you should be offering and will also allow you stay away from less-than-great properties.
Learn About the Rental Market
It’s important to obtain information about the rental earning potential of a property.
A real estate broker can usually provide this information to you, as well as data on comparable rents in the area.
You can also do your own research on places like Craigslist to give you a broader idea of rental asking prices.
You should speak with a town manager about zoning issues and the property you want.
This will help you learn if a property can be expanded, built up, or converted.
Knowing the limitations and potential of each property is important when approaching your property as a long-term investment.
Understand Your Costs
Learn the insurance and property tax costs of every property you want to invest in.
You should also have an understanding of what utility costs you’ll be responsible for, such as hot water and heat.
You should also factor in regular repair costs that may arise such as new roofing, standard wear and tear, and emergency repairs.
In addition, you should either thoroughly review a property yourself for present repair issues like mold, water damage and renovation issues so you know exactly what you’re buying.
Ultimately, following these tips will help you make a more sound investment decision when you’re considering a new rental property.
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