A good real estate investment is defined by three key principles: location, value, and purpose. And when you can tick all of these boxes, you’ll have a worthy addition to your portfolio on your hands. So, if you’re looking to add a few more properties to your name, and you want to be sure you’re investing smart here, let’s go through these principles in a little more detail below.
Don’t just be taken in by a pretty exterior – always have a checklist to complete when checking out a new investment. (Pexels Image – CC0 Licence)
Location, Location, Location
The first thing you need to think about is the location of your potential real estate investment. So ask some key questions. How close is this property to town, and all of its amenities? Is it a quiet or noisy area? What are the neighbours like? How green is the area? What kind of people would be looking to move in here, and are they your desired tenants or buyers?
Of course, if you don’t like the location of the house you’re looking at, be sure to look into the estate agents, because they’re likely to represent very similar properties (with the same features) in other areas too. Just do a bit of research to find a prime spot that’ll earn you as much of a return as possible.
Value
The value of the property you’re interested in dictates more than the price you’ll have to pay for it. It’ll also determine the taxes on the property, the insurance you’ll have to fork out for, as well as how long it’ll be on the market and the cost of listing it in the first place.
If you want to get a quick valuation, take a few minutes to look at recently sold properties in the same area, with similar looks and features. Further on from this, there are multiple ways to value a real estate property, especially if you’re just looking to invest. If you’re looking to get a rundown of the methods, be sure to check out this link right here.
Purpose
Finally, you’ll need to determine the purpose of this real estate property. What are you buying it for? What do you want to do with it, overall? Because if you’re not sure what to do with this new addition to your portfolio, there’s a strong chance you’re going to lose money through it in the near future.
There are quite a few different purposes you can buy a property for. Using it yourself, buying and flipping, buying and renting out, or even just buying during the construction stages and selling as soon as the property is completed. Which camp do you fall into here?
Quite a few different factors go into real estate investment. Most of all, if you know what to look for in a real estate investment, you’ll have a much better chance of securing a good return. So make sure you keep the above points in mind.
