Choosing a Property

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Perhaps one of the most important aspects of long term real estate investing is choosing the right property.

Easy, right?

Wrong.

When looking for the property that is right for you the best piece of advice I can give you is educate yourself.

You must take into account a variety of factors when selecting your property.  One of the major pitfalls of novice investors is choosing an investment without what we call “doing the work”.

We don’t mean hard labor, at least not yet, but it is imperative that you do your due diligence in researching the area, comparables, local industry, property appreciation  and/or rental history.  These factors should all weigh in on your decision of whether to buy a specific property.

 

Knowing the area in which you are investing is crucial, whether it be urban, suburban or rural.  Think about some of the following questions when learning about a potential area:

  • What are the local draws that people would want to frequent?
  • Is the area populated with residents or tenants?
  • How close are restaurants, grocery stores, hospitals, etc.?
  • What are the local industries that draw individuals there for employment?

Once you decide that the area is where you want to be and you find a property, the next decision you must make is your offer price.  Your real estate agent can help with this next step, or if you are like me, you can go on the internet and find a lot of this information yourself.  Before making an offer you must look at the properties close to yours and what they have sold for in the last six months.  This information can help you decide where you want to start when making an offer.

One of the key factors that may influence your initial offer price is learning about the appreciation and/or rental history of a property.  Take a look at the history of the property to see past sale prices and whether it has appreciate or depreciated.  Another thing to note, as an investor, is if the property is currently a rental.  You want to find out about the rental history.  How often has the property been vacant?  What have past investors charged for rent?

After taking into account the preceding factors, you will be more knowledgable and feel more confident when investing in a specific area.

 

Want To Learn More About Finding Properties?

SEO-48Click here to access our free video tutorial on where and how to find properties. We'll walk you through various websites and places to find properties, what to look for in a deal and what to look for in potential rental markets.  Get started now.

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