When searching for an investment property, your priorities differ then if you are looking for a place to call home. Your ROI is the main concern, which on average is about 11.1% annually.
So, how do you ensure that you reach this investment medium and hopefully more? It all depends on the type of investment property.
Be sure you make the right decision by reading this property investment guide.
Ask Yourself the Right Questions
Before you start looking at investment properties you want to keep several questions in mind and have solid answers to as many as possible. This will help narrow your search and understand the potential value of each property you visit.
- Do you want a commercial or residential property?
- What will the property be used for?
- What type of tenant will live there?
- How much can you invest?
- Do you plan to renovate?
- What reason is the property being sold?
- How long has it been on the market?
- How many tenants/owners have lived there?
- How old is the property?
Taking your time to investigate the history of your real estate investment will save you from experiencing unexpected issues when it is too late.
Investment Property Types
During your search for property investments, you will encounter several types of options to purchase. If you want to become a real estate investor then you should consider all options using the strategies above to find what suits your needs best.
A long-term investment choice is to find a property that is currently being built.
The advantage of buying an off-plan property is that you make an early investment. Builders offer lower costs at the beginning of construction to entice buyers. This also means that your property will appreciate during the building process.
The main disadvantage is that you will only see conceptual visuals of the property since a physical structure is not yet available. However, as the permits for newly constructed homes increase in 2022, you will have many options for this type of property investment.
The advantage of choosing an investment in property that is completed is that you can have a site visit. It also means that none or very few people have lived in it, making it less likely to have any damage.
A downside of a new building is that it may lack charm. Some tenants may prefer a home in San Mateo with character. However, if you are investing in rental properties this may be a better option since maintenance will be less on newer homes.
Older homes or buildings have a history to them, which may or may not be appealing to you.
Some renters enjoy living in a house with more character, which offers a unique selling point for the right kind of tenant. It may also mean that you can get a great price on the property if it needs some work.
You will only need to factor in the cost of renovations into your ROI, so careful budgeting and design consideration is needed to make a profit.
Your Next Steps
After choosing an investment property, you must learn how to manage it. You will need to determine rent prices, find a tenant, and maintain the property.
Using a property management company will save you time and ensure you get the most out of your investment.
Contact us today to see how we can help manage your rental property.