Looking for an Investment Property? Check Out These Tips First!
It’s not a secret that acquiring a real estate portfolio can be a great step to securing long-term wealth and security.
But not all investment properties are created equally and there are a couple of things to keep in mind when you are considering the purchase of a long-term rental. It’s really pretty simple: Be clear on what YOU are looking for and be clear on the needs of prospective renters, too.
Check out these priorities:
THE NUMBERS HAVE TO MAKE SENSE
It can be easy to lean into a property-purchase decision with emotion versus leaning in with numbers of the transaction. It’s lovely to be excited and connected to a property, but the numbers must make sense.
Remember that you are covering property taxes and operating costs including the average vacancy rate. Often a more mid-level property purchase is a better investment than a high-profile rental.
LOCATION, LOCATION, LOCATION
We hear it over and over again. And location really is that important and is a key in getting a good return on investment. A good location doesn’t have to be the most expensive location, but it’s important to consider schools, employment, accessible public transportation, local parks and recreational amenities including shopping and restaurants.
A good location includes safety. Check out neighborhood crime stats including petty crimes and vandalism. A little homework up front may make all the difference in securing the right property.
THINK NORMAL AND PRACTICAL
What does normal and practical mean? When you are buying a rental property, consider what folks are really looking for. Practical is a comfortable 3 bed/2bath home with an unexpected layout on a peaceful street. Normal conjures images of a place where people want to live. Normal brings to mind good schools and nearby parks.
Impractical, on the other hand, envisions charming Victorian wallpaper in every room, or over-abundant landscaping.
Get to know and understand the types of people you will be renting to and meet the needs of that clientele in a reasonable fashion. For example, seniors prefer single level living. Young families may seek nearby parks or.
Bottom Line: Keep it simple. Stick to the basics. And find long-term success.