If you’re thinking about investing in real estate, you aren’t alone. About 31% of Americans believe that real estate is a solid investment for long term financial planning.
The key to success is finding investment properties that will allow you to profit. This means buying at the right price and making rental income or selling it at a profit.
Follow these three tips to ensure your property purchase is a successful investment.
1. Educate Yourself
You’ll set yourself up for failure if you don’t educate yourself on all aspects of your real estate investment.
Read everything you can get your hands on. This includes articles about the geographic area you’re interested in, real estate news, and stories about others who have gone down the path of investing before you.
Know your market inside and out. Spend time in the area so you can get a feel for the area. Talk to local store owners, neighbors, and property managers.
2. Choose Your Neighborhood
You need to decide what type of property you want to invest in, and then find the neighborhood where they’re located. For many investors, they balance the cost of the property with future profitability. It helps to start online at sites like cornerstone.co.th to get an idea of where your most desired property is located.
Many investors look for up and coming areas that are not as developed. This makes property prices more affordable. It also gives you the longest time possible to profit from the property.
Be aware of the income level and crime rate of the area. They don’t automatically negate an area. It just means you’ll need to be more careful about the management of your investment.
3. The Property Price Fits Your Buying Strategy
Any purchase you make needs to make sense financially. Aim to buy your investment property at 10-20% below the market value.
This acts as an instant return on your investment. It’s also a safety margin if you have to sell in an emergency.
The property also needs to generate at least a 15% ROI. To figure this out, assume the rent is 1% of the purchase price. Can you subtract your debt and expenses and still be left with a 15% ROI?
Don’t forget to include your operating expenses with your debt. Here’s a list of typical costs to help you get started.
- Electric
- Gas
- Water
- Trash
- Sewer
- Pest Control
- Lawn Care
- Future maintenance budget
Most importantly, can you rent the property for the price that you need? Everything may look perfect on paper, but not be possible in real life.
Find Investment Properties Today
By sticking to these guidelines, you can be sure to find investment properties that you can profit from. Remember, this is about making money, not finding your dream home. Focus on investments that will allow you to make money long term.
Browse our real estate inventory to get an idea of what type of property is available on the market today.
