While a good investment property can be a perpetually profitable purchase, this shouldn’t be taken to mean that every investment property is guaranteed to make you money. In fact, certain properties are liable to cost you far more than they could ever make you. That being the case, anyone currently in the market for an investment property would be wise to exercise discernment and put genuine thought into any purchasing decisions. To this end, property investors should put the following pointers to practical use.
Look for Properties in Profitable Locales
If you’re eager to start generating returns, look for investment properties that are found in profitable locations. Given how important a role location can play in determining a property’s profitability, there’s little wonder as to why so many real estate professionals live by the mantra “Location, location, location.” Still, if you’re relatively new to real estate investment, you may need to educate yourself on the tenets of a profitable location.
Most importantly, you’ll need to determine how much demand for housing exists within an area. This can be done through researching local home prices and rental rates, as well as taking a look at population size, growth rates and median income. Regardless of how nice a prospective investment property is, it may not produce the desired returns if it’s found in a place where housing demand is on the wane.
Florida-based property investors on the hunt for profitable properties should check out the city of Brandenton. As you’ll find, many of the Bradenton homes for sale have a lot to offer ambitious investors.
Work with a Certified Home Inspector
As any seasoned property investor will tell you, you should never purchase a property that hasn’t undergone a professional inspection. No matter how well-maintained a property appears to be, it could be home to a host of problems that don’t become apparent until long after the sale has gone through. In instances like these, carrying out the necessary repairs and/or renovations can cost a lot more than a property ever stood to make you. Fortunately, you can nip such issues in the bud by enlisting the aid of a certified home inspector.
A professional home inspector will be able to locate and identify a wide range of issues that people outside of this field would never think to look for. So, even if you’ve personally done multiple walkthroughs of a property and haven’t come across any problems, you’ll still need to call in a certified inspector. In addition to helping ensure that you’re not hit with any unpleasant surprises post-sale, a thorough inspection may prove necessary to having the property insured.
If you’ve fallen in love with a certain property and don’t wish to place a deal in jeopardy, you may be hesitant to insist on a pre-purchase inspection. While this rationale is somewhat understandable, it’s also liable to saddle you with an investment property that’s rife with problems. So, if a seller is completely opposed to a pre-purchase inspection, this should tell you a lot about how honest they are. For maximum safety, a professional inspection should be a prerequisite for any property sale in which you participate.
Think About Upkeep Costs
Even if you’re comfortably able to afford a certain property, upkeep costs can massively cut into any profits it generates. With this in mind, take the time to calculate monthly upkeep and maintenance costs before proceeding to make a serious offer on an investment property. Depending on the size, age and general condition of the property, these costs may eat up the bulk of monthly rental income. For example, if you’re looking to invest in a large multi-family property, you may need to hire full-time maintenance personnel. So, before getting started on any paperwork, make sure you’ve carefully considered how much maintaining a property is going to cost you each month.
When seeking out your first investment property, it’s only natural that you’d look for a place that’s likely to generate maximum returns. While real estate investments can prove immensely profitable, there’s no denying that they certainly don’t come cheap. And considering how much money is on the line, first-time investors would do well to minimize their chances of buyer’s remorse. Fortunately, tracking down a profitable investment property is far from difficult – provided, of course, you’re working with the right tips.