If you’re looking for a lucrative and relatively safe way to invest your money, choosing to buy property could be a great option for you. However, if you’re going to become a landlord or simply purchase property that someone else can manage for you, you still need to make sure that what you’re investing your money into will give you a good return.
To help you in finding the right opportunity, here are three things to look for in an investment property.
The Right Neighborhood
When buying a home that you’re wanting to function as an investment property, the very first thing you should consider and research is the neighborhood. So much of the success of your investment property will depend on the neighborhood in which you purchase the property.
According to Andrew Beattie, a contributor to Investopedia.com, you’ll need to be very cognizant of what type of tenants you can expect from the area in which you buy your investment property. For example, if you purchase property that’s near a university, you’ll likely have to deal with student living issues, including potential difficulties in finding tenants when school’s out of session. Along with this, you’ll need to keep in mind that your rental property needs to fit into the neighborhood in which it belongs, so don’t think you can invest a lot of money into a home when the rest of the neighborhood hasn’t been updated.
Keep The Price Point In Check
Once you’ve decided where it is that you want to buy some investment property, you now need to find the right home to make an offer on.
As you look at different properties, DC Fawcett, a contributor to Forbes.com, recommends that you keep in mind that your first investment property should cost you as little as you can manage. Especially since you won’t be very seasoned in dealing with investment properties, having a little less money to lose can help you manage the financial risks you’re taking with this investment.
A Place With Known Costs
In addition to the cost of purchasing your investment property, there are going to be other costs associated with owning and managing the property.
Ideally, Laura Mueller, a contributor to Moving.com, shares that you should try to find a property where the fixed costs are low and the potential for variable costs are also low. To find this, make sure you know what you’ll be paying in things like property taxes and homeowner’s insurance. And as for the variable costs, try to find a property that passed the home inspection with flying colors so you won’t have to put too much money into repairs and maintenance for a while.
If you’re thinking about purchasing an investment property, consider using the tips mentioned above to help you find the right house to invest in.