You choose your primary residence based on your own wants and needs. But it’s a totally different story when you’re searching for an investment property.
Whether it’s a single-family home or a unit in a multifamily building, the game’s the same: Here, your focus should be on what potential renters and buyers are looking for.
Ask yourself these three questions when searching for a new investment property:
Is the neighborhood becoming trendy?
An up-and-coming neighborhood is an ideal place to invest in real estate. Prices are still affordable, but the value should grow pretty rapidly.
A neighborhood is getting popular if most of the following are true:
• It’s close to an already-popular community.
• A lot of houses have already been flipped.
• Young people are moving in.
• New businesses are being established and new construction is underway.
Is a business district or big city nearby?
Renters and buyers are looking for shopping and cultural amenities close by — ideally within walking distance. Having an easy commute to a business district or city could also make getting to work easier for the home’s future residents.
Is the property in good shape?
You need to think long term when investing in an up-and-coming area. Consider how much you’ll need to invest in fixing up the property. Does it have outdated appliances, broken fixtures or worn carpeting?
How much can you spend on repairs and still make a good return on investment? Depending on your budget, you might be better off investing in a property that’s already in good condition.
Invest your time wisely too. Reach out for assistance when you search for your next property.