How to identify the best properties for a real estate investor
Real estate investors have to develop a keen eye for the right property to bring them profit upside and many potential buyers. But how does a new real estate investors tell a great property from one which might flop?
Here are a few easy rules of thumb for the real estate investor when it comes to finding properties which will give a good return on investment.
Real Estate Investor: Remember the old saying ‘location, location, location’? It’s true!
Everyone knows the No. 1 commandment for a real estate investor. But, really, the reason it’s become a cliche is because it is so true. Higher returns can come your way if you find the right house at the right price in the right place. With some rehab and TLC, a investment property in a good neighborhood can be a home run for a real state investor.
When looking at location, search for homes that are near good schools, shops, public facilities like parks and hospitals, public transportation and upscale restaurants.
Real Estate Investor: Where is the home in the property cycle?
Property values go through an up-and-down cycle, so values may rise due to strong market growth, become steady or even decline during certain phases of the cycle. These cycles also vary from market-to-market, so a real estate investor needs to know where the market stands and how that is going to impact the property and the investment potential.
Real Estate Investor: Is the community on hard times?
Given the state of the economy, a real estate investor also needs to know about the state of the city they are investing in. Keep up with the news to see if industry, especially a local factory or other large business, is laying off workings. The same can be said of a booming local economy, which may be hiring and have new workers coming into town looking for homes.
Real Estate Investor: Look at demographics
When looking at whether a home will be bought quickly, a real estate investor should consider the demographics of their market. Are there many young professionals looking to move up in house and location, or is it an older community which may not be interested in pools, stairs or other home features.