When it comes to investing in real estate, both agents and buyers need to be on the same page. What makes a "good" investment? There are some key factors that can make a deal seem sweeter and it's important to keep an eye out for those.
It's trickier than is it just going to make buyers money, although that's the right place to start. An investment can't be good if it drains resources, bottom line.
You Guessed It - Location
We all know the importance of location, location, location. The fact of the matter is that location matters even more when it comes to making a good investment. This is because a personal residence can be just that, personal, but if one is investing odds are they want someone else to rent their property. If a property is to be rented out, then the majority of people need to desire that location.
Location never goes out of style. Beachfront is always going to be sought after. Walkable always rents. These rules of thumb are good to go by, and maybe a property needs some love in a great area - odds are it's a good investment.
That being said, a great location rarely means a low listing price which is another desirable component of good investments. In general, as a buyer, the lower the price the better. This means that your mortgage will be lower and your rental income can cover a lot or all of the expenses. Of course, a hefty down payment makes this happen too.
Show Me the Money
Next, do you want to renovate or do you want turnkey? Both have their perks. Either way, it's important to look over necessary changes. Before signing any paperwork and while evaluating if an investment is good or not - do the math on what needs to change. Or, consider what will need to change - if a building needs a new roof in 10 years - odds are that will be your problem. Is that something a buyer wants to deal with?
Cash flow is King when it comes to good investments. So, make sure that crunching numbers about rental income is as realistic as possible. It's a good idea to look at the comps in the area. That way you know what you're working with.
A good investment still has some personal sides to it, but in general when we're talking money - what is good and bad is universal. So, be sure to look out for location, potential for rental income, and what will need to be done now and in the future.
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