Making Good Property Investment Decisions
Buying investment properties to boost your portfolio will never be a bad idea. For those who are in the investment game of the long haul, real estate is guaranteed to give you a good return on your money. However, you still have to be confident you are making a good decision. Rental or investment properties aren’t all made equal. There are some factors that can and should influence your decision to buy.
Making good choices means being informed and knowing what to look out for and what to ask before committing to the purchase.
Fixer uppers and flipping have become popular over indecent years. Partly no doubt, thanks to the rise of channels such as HGTV and various reality shows dedicated to home makeovers. But choosing a property for your portfolio in poor condition can backfire on you, as can not be thorough before completing escrow.
Always have each property survey to discover anything hidden you might have missed or to give you an idea of the condition of all areas of the home. Especially if it will need a roof replacement, foundation repairs, or structural work, as these can be costly and put a dent in your finances to bring them back up to scratch.
Is the area earmarked for regeneration, or has it become increasingly saturated, meaning you aren’t getting as good a deal as possible? This is an important aspect to consider for investment properties. After all, they are there to make you money, And you want to make as much as possible. Moving into an untapped area will allow you to get properties for low prices. Then you can wait for the boom to pick up value and allow your investment to soar as the regeneration efforts reap the rewards.
While you want to focus on up-and-coming areas, you don’t want to invest heavily in areas with high crime rates. This can be a bad decision. Areas with high crime rates can often lead to the following;
- Lower rental yields
- Increased risk of break-ins and property damage
- A loss or stagnation of value
- Lower chance of getting funding to complete the purchase or fund renovations
While you shouldn’t always avoid these areas, people still need homes, after all. You should think carefully about the implications of purchasing in high-crime areas.
Property taxes should be one of the deciding factors when investing in an area. You can talk to the municipality office or local homeowners to gauge the current property taxes and give you an idea of what to expect. The last thing you want is not to be able to get tenants in your property due to the high taxes and the rent to cover these costs.
You need to do your homework before investing in property. There is a lot that goes into buying property for investment purposes. Balancing the books is part of making good investments. The last thing you want is for your purchase to be costing you money, not making it. So take a step back, look at the bigger picture then decide if this is the right purchase for your portfolio.