Not every property is good investment property! And not every investment is a risk-free venture. With any type of investment, comes many types of risks. However, there are a number of ways in which you can minimize the risk and there are also a number of factors you can watch out for to ensure that your first investment proceeds in the expected fashion – one in which you make a good profit.
If you’re a first time investor aspiring to make it big in the real estate arena and be counted as an equal among investors like Jeff Adams, the right start is what you need. Therefore, you should know where to begin and plan how to begin.
Are you considering property flipping? Do you want to invest in commercial property? Do you want to strike the best foreclosure deal and sell the property for a whopping profit? Do you want to put up the investment property on rent? Or will you use it as a second home? There are a number of options to make good on your investment. However, acquiring the right property is the first step.
So, how will you judge whether the property in consideration will give you the best returns? And how do you prevent your first investment from flopping?
As it is with any investment, there are always a few telltale signs which can make or break your investment. Look for these factors in your potential investment property to ensure success with your first venture.
- Location
Location is the primary factor with any real estate investment which can’t be stressed enough. Don’t look for low priced property in bad neighborhoods. Stick to desirable neighborhoods where people want to live. Local cities are the best place to begin.
- Ease of Access
The first priority of a buyer is to look for a home with easy access to schools, shopping centers, commercial hubs, playgrounds, entertainment centers, major transit routes and airports. Homes with easy access to these areas are sold easily.
- Condition of the Property
It’s not advisable to buy dilapidated property just because you’re acquiring it at a low price. Look for property in sound condition and make sure every property you consider is thoroughly examined with a professional home inspector to help you determine its condition and its worth.
- Repairs, Fixes & Renovations
Consider all the renovation costs you will have to bear once the property has been inspected. If your estimates say that you will still make a 20% profit after sale, in spite of the renovation and repair costs involved, the investment is a good deal.
- Proximity to You
Since you’re a first timer, look for property that is close to your location so that you do not spend unnecessary time and money to commute to the location of your investment property.
- Value
Look for properties below market value to ensure you will make a profit after selling it. Foreclosed homes, distressed properties and short sales are the best place to start.
When you start looking for properties, you will find a million homes for sale. However, if you invest correctly by keeping these 6 determining factors in mind, you can expect good returns.
