If you’re thinking about purchasing an investment property, you’ve probably quickly discovered that there is a lot to think about. How do you find just the right space, for just the right price, in just the right location? What criteria are you looking at, and what should you be looking at?
While there are plenty of factors to consider, we’ve narrowed it down to the four most important criteria you need to consider when finding a property to purchase. Think about them carefully as you search for a property that is right for your needs.
Are you looking for a single family home, or for a multi-family unit? When making this decision, consider the fact that for single family homes, turnover is usually lower, tenants commonly have a more stable income, and the property is typically easier to resell when you’re ready. On the flip side, for a multifamily property, you’ll be able to collect more rent, and you may be able to fill it more quickly when you have vacancies. In either case, a property management company can help you take care of marketing and filling your property, as well as managing the financial side of things.
When considering location, you’ll have to find a good balance of proximity and value. The truth is, if you have help managing your property (again, from a property management company) it doesn’t really matter where it is—your rent collection, maintenance, and repairs will all be taken care of for you. If you have this flexibility, you are more able to look for a location with a thriving market and good appreciation potential. Make sure that no matter where you look, you take neighborhood into consideration as well as town or city. Especially if you’re planning on a single family home that may house a large family, make sure you consider nearby schools and community features.
Obviously, when purchasing property, price is a big factor. You want to find something within your own budget, of course; make sure you consider taxes, closing costs, and other fees when determining if the property is something you can actually afford. Along with this, you also want to find something that will turn a decent profit when you rent or sell. Make sure you know what comparable homes are renting or selling for in the area. If the monthly rent you’d be able to charge on a property won’t cover your mortgage, plus maintenance, while still leaving you with a worthwhile profit, it’s probably not worth it.
Along with the price of the property, you need to consider what condition it’s in. If the property needs considerable upgrades or repairs, that will add to your cost significantly. Don’t let a property in poor condition scare you, but make sure you are up to the challenge of fixing it up, taking both time and cost into account. Fixing up a property is no small task, but it could pay off big time. Knowing whether or not you are willing and able to fix up a property may change your shopping process. If you are specifically looking for a fixer-upper, for example, you may be able to search for properties within a lower price range.
As you keep these four criteria in mind, you’ll be well on your way to finding an investment property that meets your needs perfectly. If you need more advice or help finding or managing your investment property, call Real Property Management at 480-719-1243 today. We can help you keep your property in good shape, your cash flow high, and your stress level low. You can also contact us online for a free quote and to see how we can help you. We look forward to working with you!