Taking the plunge into the world of real estate investing can be as much overwhelming as it is exciting. Buying a property isn't as simple as purchasing a house and selling it the next day for double the profit. If it were, everybody would do it. Plus, there are capital gains taxes that may be applicable and need to be considered.

In actuality, there are many factors to look into when investing your finances into a home, and a variety of different routes to turn a profit. The good news is you don’t have to start your journey alone.

If you are considering investing in real estate, you should work with a real estate brokerage that can educate you, help you weigh your options, and address the essential factors that will help you make an educated decision.

While there are definitely many elements to consider when investing in real estate, these are the top factors that investors should look for when viewing a property.

Location

You've probably heard the phrase "Location, location, location." British property developer Harold Samuel coined it in the mid-1940s, and it's as accurate today as it was then. Any good real estate agent will tell you; location is everything. 

What most don’t realize, however, is that location means more than just the physical placement of the property. It can also refer to the following.

• Proximity to things like public parks, public transit, restaurants, and walk scores.

• Building amenities, especially when it comes to condos, are important. Does the building come with a pool, a gym, or a designated pet area? If not, are there some within walking distance of the investment?

• It's rare to get a guaranteed beautiful view, especially in larger cities. This can be an important factor, especially if it's an initial selling point to your investment. Be aware of any established future construction plans in the neighbourhood. Having a rival property block your view may hinder and decrease the value of your property before it has a chance to sell at its maximum potential.

• Accessibility is a significant factor to consider when it comes to a property, especially if you're planning to rent it out. Having a property that is accessible opens your investment to a range of new clients, such as those with disabilities, the elderly, and families that may frequently use strollers. Accessibility is also a good way of 'future proofing' a property. Buyers looking for a long-term home can see themselves growing old within it with fewer concerns. As we learned from the pandemic, things like automatic doors are also incredibly helpful in helping reduce the risk of contact viruses and germs.

Purpose

Not all investors have the same plans for a property. There are many different uses one may have for their investment. 

Self-Use

Investors may buy a property and choose to live in it themselves. This way, they can first handle any necessary renovations, guarantee its upkeep, and save on payments on a secondary property. This option also enables the investor to sell their property at a moment's notice, whenever it is convenient for them.

Renting

In the last ten years alone, rent has increased a national average of 36%. Many investors choose this route to provide a guaranteed monthly profit from tenants, while simultaneously watching property value trends for the future. However, this option also entails needing to perform landlord duties such as repairs and tenant disputes. Some investors may choose to either perform these duties themselves or hire a management company to represent them, though this comes at an additional cost.

Resale

 There are two options for buying and re-selling a home: short-term and long-term.

• Short-term resales: Short-term resales often refer to when an investor purchases a property with the intent of a quick turnaround. This could mean new properties under construction or house flipping. These properties are then sold as quickly as possible after completion to make an immediate profit. There may also be added tax implications, depending upon how quickly the property is sold.

• Long-term resales: Long-term resales require more of a waiting game approach. This is usually when an investor will purchase a property in an up-and-coming area, knowing its net worth will rise in the upcoming years.

Return of Investment

Nobody plans to invest in something that will lose money. Depending on their plans for the property, there are various ways investors can anticipate their ROI and balance it out against the expenses for each option.

For example, investors using a property for a long-term resale approach still have to have expenses like property taxes and utilities. Because of this, many may choose to combine this approach with renting out the property to offset the monthly fees. However, this method, in turn, comes with the previously mentioned fees of property maintenance and landlord duties. 

Meanwhile, short term resales such as house flipping can come with additional unexpected renovation costs. Investors must walk a delicate line of cost vs profit and decide for themselves, with the guidance of an experienced real estate salesperson, the best use for their investment opportunity.