If you’re considering buying your first residential investment property, now is the perfect time to do it. When looking for investment properties, you want to make sure you’re getting a good deal that will pay off, but how do you know which property is best? How do you determine if a property is a good investment property? Here are some tips to help you determine the best residential investment property.
Location is Everything
When searching for an investment property, the location you pick means everything. You want to invest in an area that’s the best you can afford. Why? The location you pick will determine the tenants you’ll attract, as well as the amount you can charge to rent your residential investment property. Desirable locations are more likely to appreciate overtime and aren’t as likely to suffer as much from the ups and downs of the real estate market.
Look to the Future
When looking at investment properties, think about long-term ownership. By doing so, your rental income will be a nice complement to your everyday job. Don’t purchase an investment property just to turn around and flip it. Hold onto the property until the market has fully stabilized before selling.
Know What You’re Getting Into
Be sure to look at the property for what it really is. Look past the old paint and worn carpet to see the potential a property possess. But, be careful of major expenses. Cosmetic fixes are a small price to pay when compared to new plumbing, roofing and electrical. When renovating your residential investment property, only hire skilled workers because you don’t want to end up paying for a job that wasn’t conducted correctly the first time.
Cost of Ownership
When purchasing an investment property, you’ll need to calculate all of the costs of ownership, not just the monthly mortgage payments. Take into account the insurance, taxes, maintenance, utilities, repairs and vacancies to make sure you aren’t getting in over your head.
When purchasing an investment property, you’ll need to read your rights as a landlord and screen your tenants carefully. Don’t forget to look into the tax benefits you may receive from owning an investment property as well. Be sure to consider all of your options when looking at investment properties. If you’d like to learn more about a residential investment property, contact Steve Larson today.