The benefits of investing in Real Estate properties cant be overemphasized especially if you are a witness of its reward. Smart Real Estate investment is one sure, genuine and fast way to create wealth not just for the present but also for the future. So stop contemplating buying a property, act on it.
However, as an investor, you should be able to know what determines a profitable real estate investment. According to Research, location, and condition are the major determining factors in deciding if a property is a good purchase.
Here is our own guide to Buying Profitable Real Estate Investment Property;
1. Plan Your Finances
The first step to buying profitable investment properties in our guide is to plan your finance. In this step, as a real estate investor, it is necessary to conduct a financial analysis and understand all financial aspects of real estate investing.
The first thing to learn is the numerous financing methods for buying an investment property – mortgage loans, private money lenders, hard money lenders, etc. Successful real estate investors always analyze what each financing method requires and its outputs to decide which one will help them reach their investment and financial goals.
2. Choose The Property Type
The next step in our guide to keying into profitable investment deals is to determine which type of real estate property you want to invest your money in. The real estate market is filled with various types of investment properties. For example, there are lands, single-family homes, multi-family homes, condos, townhouses, apartments, etc.
With all these types available for investors to choose from, how do property investors determine which the best type is? You might think that the best income property is one purchased at a cheap price. However, this isn’t so. The right answer to that is simple: the best type of property is the one that generates the best profits (return on investment).
Thus, focusing only on the purchase price is a major mistake that a real estate investor must avoid. More often than not, profitable real estate investment properties are located in great locations, are positive cash flowing, require minimal maintenance, and have a high appreciation rate.
3. Choose the Right Location
The location you choose to invest in will go a long way in determining if you make a loss or profit, both on the short and long run. This is evidenced in the different amount of prices of properties. The location of your property determines the amount you’ll charge if you decide to rent out, the type of tenants you attract or how much value such property is worth. For instance, having a property for rent in a student residential area or even in an area close to businesses means you will get a good number of regular vacancies which equally translates to income.
In addition, in terms of security, if a property is located in a high crime rate area, the probability of people patronizing you for rent will be very low. It is, therefore, necessary to carefully choose the right location to get the best out of your investment.
4. Access To Amenities
Access to social amenities is one way to determine a profitable investment. is the area you want to invest in lacking basic amenities? A good real estate investment deal should have access to good water, good road network to avoid issues of accessibility. There should be good roads connecting the area to other places. You also need to know if it’s in close proximity to schools, hospitals, e.t.c.
After investing, the next important thing is making the best out of your investment, and you may not be able to do this if you are not patient and thorough enough to invest in profitable deals.