Investing in property can have huge payoffs down the line — whether it’s a rental property or residential property. But before that happens, you need to know how to identify a good investment property when you see one. Below are a few helpful tips to guide you.
Compare purchase price and appraisal value
Always check first if a property has conflicting purchase price and appraisal values. You can do so by visiting the website of the county appraisal district and looking up the property’s address.
If you find out that the advertised selling price is lower than the appraiser’s assessment value, you can make a decent profit out of making this acquisition.
Scrutinize the property to better craft your pitch
When looking at potential property investments, pay attention to how they are presented online and offline.
Are the photos stellar or are they grainy and out of focus? When you’re checking out the property in person, is it in good condition or are there quite a few repairs that need to be done?
If a property isn’t properly maintained, chances are the seller is looking to get rid of it quickly. In this scenario, you can make a pitch to purchase it at a considerably lower price. The seller will likely oblige and grant you a huge discount.
Check out properties located in primary markets
Location should be top of mind when your goal is to invest in property. It will dictate your rental price, maintenance costs, and occupancy rate, among other things.
If a rental or residential property is in a sought-after neighborhood, its mere location is most likely to bring you generous profits.
Look for a high-performing housing market that has a number of options that fit your investment appetite. Conduct a thorough analysis of the market and consider factors such as the availability of good schools, public transport, a central business district, or a good mix of commercial establishments.
Target areas with signs of progress
Sometimes, certain locales are on the verge of a property boom but haven’t exactly gotten there yet. Nevertheless, all signs point to their imminent breakout. If you keep abreast of recent developments in certain communities (e.g., the construction of a new mall or a soon-to-be-opened theme park), you might just find properties to buy at insanely low rates with high chances of getting marked up in value once these community developments are finally in operation.
Here’s a bonus tip: check out locations for new Starbucks branches.
Don’t ignore small investment properties
While expensive properties may result in higher income, they also have high operating costs. That can be challenging to manage for some.
You may be better off going small and pursuing single-family homes in a decent housing market. Smaller properties are often easier to maintain and repair. Plus, if you can ensure a long-term lease or consistently prevent tenant turnover, you’ll be recovering your investment in no time.
Some savvy investors often purchase a multi-unit property, live in one of those units, and rent out the rest — a strategy known in the industry as house hacking.
Get advice from a real estate professional
With over 30 years of experience in selling and leasing properties, we’ll make sure you find the ideal property investment. Just reach out to our team here at the Cardinal Realty Group. Just call 636.225.0385 or send an email at Hal(at)CardinalRealtyGroup(dotted)com.