If you are considering investing in property, there is a lot to consider. The state of the market is huge for this type of purchase. If you choose the right property and buy wisely, investing can pay off. When you buy your principal residence you consider neighborhoods, crime rate, what is nearby, and green space. When you are looking for a spot for an investment property, there is so much more to think about.
Pick a location near your primary residence.
Because you are going to be driving back and forth between properties, it is best that you keep the drive as short as possible. When something breaks, tenants need help or you need to show the place, you will need to get there as quick as possible. The majority of investment properties are located less than 50 miles from the investors home.
Choose an investment goal. Are you trying to yield or grow? In the best situations, you can do both. If you are looking to yield, select the biggest investment property in the best location in your budget. Places in great neighborhoods bring higher rent and are always in high demand. If growth is your goal, consider trying out an up and coming location.
Check out zoning laws. Zoning laws regulate how a property can be used. It varies in each location. If you plan to rent out an investment property, you will need to make sure that tenants are allowed in the zone you are in.
Manage your money. Investment properties are going to cost more than you think. Taxes are going to increase with the value of the home, maintenance costs are going to double, tenants are going to come and go with the potential of late rent. You should calculate the return on investment when you find a place you like. Investment properties can be a great way to get extra cash flow and get yourself into a new market. It can be a risky trade to get into, but with proper research (and guidance from your realtor!) it can be a great reward.