5 Key Tips to Find a Profitable Investment Property
The real estate market is probably one of the safest and most lucrative sectors you could invest in nowadays. Many benefits might appeal to your career and financial goals, ranging from a stable income stream to a fast profit, from tax benefits to long-term property appreciation and more. Investing in real estate will allow you to build financial stability and affluence down the road. However, even though it might be a lucrative sector, that doesn’t mean success is guaranteed. If you don’t take the time and put in the effort into finding a genuinely profitable investment property, you might find yourself unable to generate enough income. With that in mind, let’s take a look at the five key tips that will help you find a profitable investment property on the national and international markets.
Research commercial and residential neighborhoods
First things first: you should decide whether to put your investment capital into a commercial or residential property. This might not be easy as many socio-economic factors govern every market and shape the local trends and buying habits. In turn, these trends will directly influence the mindset of your target demographic and attract or deter affluent tenants and buyers. Needless to say, you need to do your research before making any decisions.
Be sure to stay on top of the local trends that dictate the course of the market. After all, there’s not much use in buying a commercial property in a family-friendly neighborhood. Nor should you fund the development of a residential property in a business area.
Consider properties listed as foreclosures
As a novice, you need to:
- Find properties that are selling below the average going price in the region
- Save money on your first investment
- Find a good deal that will allow you finance crucial renovations and upgrades that will attract the right buyer.
Typically, you will be able to find affordable properties if you look for foreclosures in your region. Ask around with the help of local real estate agents, or check the county court for any properties going through foreclosure. You will often find that the bank is selling the property only to cover its mortgage costs, so you will be able to buy it for a high price.
Make sure all amenities are present
No matter if you are looking into the residential or commercial sector, or if you’re looking into local neighborhoods or international investment opportunities, you have to make sure that the area has all of the essential supporting amenities to appeal to your target demographic. All of the following factors will significantly influence the going price of properties in an area:
- Proximity of property to shopping malls, schools, restaurants and coffee shops
- The safety of the neighborhood
- Its infrastructure
- The connections to public transport.
Look into rapidly-developing regions
Don’t limit yourself to local or national real estate markets and turn to those rapidly-developing foreign markets. Indonesia, for example, is currently experiencing a residential and commercial boom. With the help of specialized real estate firms such as Invest Islands, foreign investors can buy and own land in Indonesia nowadays, even without a local nominee. In other words, you can invest in a promising real estate opportunity without any legal issues while ensuring a positive ROI.
Check local taxes, rent, and selling prices
And finally, be sure to research
- The domestic tax laws
- The average rent and
- Selling prices in every market you’re considering for your next investment.
What you might find is that the average rent price isn’t enough to generate a positive ROI when taxes and mortgage payments are taken into account. If that is the case, you should probably turn to more profitable regions where you can capitalize on your investment in a reasonable time-frame.
Investing in real estate might be a brilliant idea, but that doesn’t mean you shouldn’t do some research first. Use these tips to find a valuable property that will attract the right buyers and help you quickly monetize your investment.
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