Invest Better: 3 Signs a Property Would Be Worth Your Money

Written by Posted On Thursday, 15 March 2018 17:25

Real estate investing is a great way to make money, whether you plan to rent out properties you own for passive income, or fix and flip properties for quick profits. However, you can also lose quite a bit of money by making bad deals and sinking your money into the wrong properties. That’s why before you decide to buy a home, you should look for the following three signs that it’s a smart choice.

 

It’s in a Neighborhood That’s on the Rise

The most important factor in the value of a property is where that property is located. When you’re sizing up a property, do some thorough research on the neighborhood. You need to know whether this is a hot neighborhood where people want to live or one where people can’t wait to leave. One good indicator of a hot neighborhood is high-end grocery stores, as these typically mean there are plenty of high-income professionals in the area.

 

Properties Are Selling or Renting Quickly

When you’re researching properties, look at the days on market (DOM) for property listings in that area. If this number is getting lower and lower, it’s a good time to buy, but you’ll need to move fast. If homes are spending months for sale, then you could also have trouble selling, should you be interested in flipping the property. If you plan to rent it out, then you should check rental listings for the area. Even if you can’t see exactly how long a listing has been up, you can see if the landlord is offering incentives, such as discounted rent, that indicate they’ve had trouble finding tenants. It may be worth consulting a realty agency to see if there are reasons for the decline in that particular area.

 

It Doesn’t Require Many Repairs or Renovations

No matter how you’re planning to make money from a property, you’ll have a better shot at success when you don’t need to make all sorts of repairs before you can do anything with it. Fixer-uppers aren’t always bad, but it’s extremely easy to underestimate just how much it will cost to fix up a home. You could find yourself spending more than you bargained for. Aim for homes that only need some minor work, at most, especially since these can start making you money almost immediately.

 

Pulling the trigger on an investment property isn’t easy, and it’s harder when you don’t have much experience. Keep the three tips above in mind so that you know what to look for when you buy.

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