Real estate investing can be a reliable markets to get into, for the most part. However, that doesn’t mean that you’re going to make your money by simply buying up any property that comes your way. You need to have a plan as to how you’re going to make your money and to be able to recognise which properties offer a good return on investment. Here, we’re going to look at some of the signs of a good investment, and where you can look for those opportunities that most investors might miss.
Know the signs of an area in development
One of the biggest contributing factors to both the rental yields and overall value of a property is the area that it is situated in. The best investments you can make involve being able to grab some property in an area that is currently being developed or planned for development, such as an improvement of nearby facilities and utilities, or the moving in of business. Look for the signs of an area that is improving, like improving transit, rebuilding of properties, new businesses, and more.
Look to overseas opportunities, as well
There are plenty of overseas areas that look for foreign investors to give money to improve their local areas, as well. This can include newly built neighbourhoods that are being sold even before they are bought, but you should also look at international property website listings, especially for developing countries that are at the end of a cycle of industrialisation. As countries get into the later stages of industrialisation and also start developing a strong service or tourism economy, then the properties in that country, especially in areas with strong professional and expatriate presences, can start to skyrocket in value. Of course, being able to identify which country is the next international hotspot isn’t always easy, but there are several newly developed nations that could be prime candidates.
Know how you’re making your money with it
Aside from investing in the right properties in the right places, at the right times, you should also have a strong idea of how you’re going to be making money from it. This typically comes from understanding the market that is interested in living in those properties. In areas full of young professionals, those in education, or those who otherwise are not looking to buy, when you might want to buy an apartment building to rent out. For residential areas, then your path to profit is most likely going to be in home improvement and renovation, or in holding onto the property during a neighbourhood development cycle. Either way, before you buy property, have a firm idea already in your mind as to how it will make you money.
Mind your property taxes (and other costs)
Of course, you shouldn’t always just consider how much you stand to make, but how much you stand to lose, as well. After all, that’s a key part of the equation when it comes to determining or discovering profitability. To that end, the first cost you should look at is the property taxes. These taxes are going to vary widely from area to area. While property taxes are not always a bad thing, and rather can indicate an area that is ascending in value, you should bear in mind how likely you’re going to have to be paying those taxes. You need to also budget for how much you’re going to be spending on any redecorating, renovation, or rebuilding.
Stay connected
Simply put, if you want to make sure that you’re always on the ball when it comes to the latest and greatest opportunities, you need to make sure that you have a good circle of people in the know who are also likely to let you know. Network with real estate professionals and work with those who are willing to help you (often for a cut of the profits, of course), and get yourself logged into multiple listing services and other exclusive listings that aren’t going to be on the consumer market. Good real estate relationships are reciprocal, of course, so you need to share your own findings amongst the circle you make to really benefit from it.
Always bear in mind that there are no guarantees when it comes to real estate investment. You’re taking something of a risk even on opportunities that seem like a slam dunk. Make sure you’re investing what you can afford to and diversifying your real estate investments with forays into other markets, too.
You must log in to post a comment.