by Katie Conroy at advicemine.com
Experts hold that while real estate ownership in America has gone down over time, owning property can be a solution to financial security. Investing in real estate is a lucrative avenue for financially minded individuals looking to grow their money.
An investment property is one purchased with the specific intent of making a profit, either by renting the property out or selling it when the property’s value has increased. Investors who buy and sell real estate seek to get the most out of a property by analyzing price trends in the housing market or by putting in some elbow grease to make a property more appealing to the future buyer. First-time investment property buyers can throw their hats in the ring by following these tips and advice on how to buy and manage an investment property.
Look for Essential Features
You aren’t likely to find success from your real estate investment by purchasing the first vacant property you find. There are certain factors to consider when determining if a property will be a worthwhile investment. These criteria may be slightly different if you intend to use the real estate as a rental property as opposed to selling for a profit. Even so, certain features are essential for any profitable investment property:
- A desirable location
- Good condition or low renovation costs
- Manageable long-term maintenance costs
Consider Your Financial Situation
After vetting your options, there are still some key things to be aware of before pulling the trigger on an investment property. Namely, you’ll need to make sure all your ducks are in a row in terms of finances. Researching the housing market in a given area is vital — you should pay attention to how much money homes are being sold for compared to the actual list price, and how quickly they go. This reveals whether a property in the area is actually going to be above or below your budget, and how much time you’ll actually have to mull over your decision.
One more thing to note is the impending down payment cost for your desired investment property. This could be as much as double the amount you would expect to pay for a house you would live in yourself.
Be Prepared for Property Management
Property management is the meat and potatoes of the real estate investment game. Investors should consider their renovation budget before purchasing a property, as some fixer-upper homes may require more work and manpower than they can afford.
Exterior upkeep is particularly important, especially for a property that you plan to rent out. A common task that property investors must oversee is the removal of dead trees, which can pose a serious threat of injury and harm the visual appeal of a property. Online reviews and testimonials on sites like Angi will help with finding a reputable tree removal service in your area, which should be followed up with a request for price estimates and inquiring about stump grinding and disposal services.
Property management can become expensive; even a tree removal can range from $50 to up to $1,500. If you are making a business out of your investment, look into using an affordable formation service to establish a Missouri LLC to safeguard your assets from litigation. Formation services like Zenbusiness can help you set up your Mizz LLC so you can focus on other areas of your business.
Property investment can be a lucrative venture, and can even become a long-term business strategy for those with an entrepreneurial spirit, though real estate investment is often a wise use of capital even as a one-off project. Choose the right property and you stand to make a tidy profit.
Canopy Road Real Estate can help you find a home that’s perfect as your first investment property. You can get in contact with us today by calling (816) 521-6999.