Choosing An Investment Property
Unlike your personal home, choosing an investment property is typically based on your financial goals. Before proceeding with a search for an investment property it is very important to establish your investment goals.
Here are some examples of the many questions you should ask yourself:
- Am I investing for income or appreciation?
- How much capital can I commit to the property?
- How much time do I have to manage the property?
- How long do I intend to keep the property?
- How far am I willing to travel?
By doing a thorough process of evaluation of your general goals prior to beginning your search, you will ensure that the properties you identify for consideration meet your criteria.
Once your primary goals are established, you can start the process of identifying individual properties. Of course, each property is unique and thus you will want to ask a different set of questions to evaluate each property. Some of these questions might include:
- How much income will the property generate?
- What expenses will the property have?
- What improvements will be needed by the property?
- How much time will it take to manage the property?
- How close is the property to commercial areas?
- What kind of access is there to public transport facilities?
- What is the local population, and is it growing?
- What is the state of the local economy?
- How would this property affect my taxes?
By asking detailed questions, and going through a thorough due diligence process, you'll maximize your chance for having a profitable investment. One thing to always remember is that the value of any property starts with the land, its location and any benefits that accrue from this location. Buildings, on the other hand, have a limited lifespan and will require ongoing maintenance and improvement.
Searching for property can be a great challenge, and the best way to get started is to start searching the MLS online to get an idea of the types of properties that are out there. When you find something that interests you, then please contact us to get further consultation or to arrange to visit the property.