What Makes a Good Investment Property?
No matter the route you go for real estate investing — such as fixing up your own home, flipping, or renting out a home or commercial property — you want to make sure you’re choosing the right property. These tips can help your income property bring you ROI instead of regret.
The necessary changes are relatively minor.
Some real estate investors pass on home inspections in favor of a faster closing date. These investors typically have an experienced team of contractors who complete renovations quickly. Time is of the essence with investment properties, because the longer you’re holding onto a vacant home, the longer it will take for you to generate a profit.
This is true for flipping or renting out a property, though less so if you’re renovating for your own home. That being said, in nearly every instance you want a property that doesn’t require massive changes. Foundation problems, mold, or other damages will massively eat away at both time and your savings.
The location is a selling point.
Investment property success lies heavily in where the property is located.
- For most commercial properties, lots of traffic and visibility is crucial. This isn’t always the case if your commercial property is a huge space, such as for corporate offices. But for local shops, you need a location that requires little to no commuting time for your clientele.
- When buying your first rental property, consider the demographic you’re targeting. Near a college town? Look for a house that’s on-campus or close to it. Single-family home? Suburbs or just outside the hustle and bustle of a city are great locations.
- If wanting to renovate and sell your own home later on, you should pick a location that’s on the up and up. It’s not ideally located right now, but it will be in 5-15 years. Smaller cities or cities that are remote (such as places out West) are a good place to look.
The property has potential.
It’s OK if your potential rental investment is a carpet nightmare out of the ‘70s. But qualities like hardwood floors (beneath all that carpet), high ceilings, and killer views make this a property with potential. Again, you don’t want a money pit for an income property, but the underlying beauty can turn out incredibly valuable.
Similarly, if your property is in one of those “up-and-up” locations, there is a ton of potential in appreciation. Property owners in cities like Fort Collins and Boulder experienced insane ROI, selling just as these cities became increasingly popular. Even commercial property owners can see huge success from renting out or selling in an area that’s on the come-up.
No property is perfect, but considering these factors can help turn your investment into a successful one. Find the perfect investment property or sell the one you have with RealtyHive! Learn more about time-limited events and get started today.