Thursday, March 12, 2020

How to Ensure a Solid Investment When Buying Property

Real estate always seems to be a popular investment. It is, however, not always as solid as some might think. It's very possible to lose money on real estate, especially if you don't go into the process with an understanding of what types of properties are the most valuable. Below are a few of the factors you should keep in mind when trying to ensure a solid property investment.

Lot Size

No one is making more land. This makes the size of a lot especially valuable, with a premium paid for every square foot in those cities that have experienced rapid growth. The goal is to find a property with the right kind of space for your ideal buyer or renter - big enough to seem impressive, but no so big that the acreage seems like it would be a burden.

Home Size

At least as important as the size of the lot is the size of the home. When you look to buy property, you want to buy the kind of home that your prospective tenants or buyers would want to move into. 

While you can never tell exactly what size a given customer might want, you can figure out what size of property tends to move the most quickly in the area in which you buy. Going too big or too small can leave you with a money-draining property on your hands.

Age of the Home

Older homes can have a great deal of appeal to some buyers, but with age comes problems. If you invest in an older home as a rental, for example, you can expect to have to deal with more repairs. 

If you're buying an older house to flip, you'll need to not only spend more money on rehabbing the property but also on adding upgrades. Unless you're buying in an area that tends to prize older homes, it's best to try to stick to something that's a little more modern. 

The Neighborhood

You can't change a property's location. Your goal should always be to find a property in either a neighborhood that is stable or one that is in the middle of a growth pattern. If you can do this, you can expect your property and rent values to rise until they reach a stable plateau. 

You might want to risk buying cheap in a rougher spot, but realize that you'll be betting on a kind of growth pattern that is never guaranteed to occur.

Do some research before you buy real estate. Find the right size, the right place, and the right age for the best results. With a little effort, you can make a great investment that will be there for decades to come.

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