10 Things to Think About if You Are Considering Investing in Real Estate

Select A Prime Location:

There’s a reason when people talk about real estate; you hear the old adage, “location, location, location.” Take a good, hard look at the location of the property you are considering as an investment. Prime location is what makes a property valuable and ensures resale ability. Consider factors such as access to main roadways and thoroughfares, access to water for future development, and potential zoning opportunities or hindrances. For rentals or flipped properties, consider factors such as rental potential, safety, and access to amenities.

Know the Job Market:

Research the local job market and opportunities for future growth. A thriving job market is key for rental properties as it attracts potential renters and positively impacts property values.

Look for Appreciation Potential:

Assess the potential for property appreciation. Take into consideration factors such as the property's location, future growth in the area, and the possibility of making updates.

Check Listings and Vacancies:

Analyze local rental listings and vacancy rates to determine seasonal cycles or declining areas that may affect rental income.

Keep it Low-Maintenance:

Try to invest in low-maintenance properties to attract stable, long-term renters and to minimize management issues and expenses.

Know When to Flip or When to Rent:

Some properties are good investments for long-term rentals, and others are better investments as a turnover or flip. When considering an investment, it is key to determine whether the property is most appropriate for a long- or short-term investment. If a property is move-in ready, it could make a great rental, but if it needs a lot of work and the time and cost outweigh the potential, it may be better to flip it.

Go by the Numbers, Not Emotion:

Develop a financial strategy and stick to it. Try to prioritize facts and numbers over your personal vision to ensure a profitable investment.

Get an Inspection:

Thoroughly inspect the property or have an environmental site assessment done to uncover potential issues, especially with critical components like water heaters, roofs, and environmental contaminants.

Identify the Taxes:

Understand how property taxes work before investing, noting that higher taxes in certain areas may be justified by attracting stable renters. Take into account long-term financial gains and tax burdens when selling as well.

Property Management:

If you are the type of investor who is not interested in managing properties directly, then hiring a property manager is key. Property managers will handle tenant management, maintenance, and legal aspects.

The overarching advice is to approach any real estate investment with a strategic mindset, considering all factors beforehand, to maximize profitability and minimize potential risks.