Purchasing your first investment property is an exciting time in your life. After all, if all goes well, you could potentially make a great deal of money on the purchase. At the same time, purchasing an investment property can be a nerve wracking experience due to the amount of money that is at stake. For this reason, it is important for you to keep a few things in mind when purchasing an investment property. To that end, here are five tips for purchasing your first investment property.
Tip #1: Choose the Right Location
Everyone knows that the number one rule in real estate is “location, location, location.” The same is true when it comes to investment property. Therefore, in order to have the best chance of success with your investment property, you should be sure to purchase your property in the best location possible. Location is the one thing that you can’t change after you purchase a property, so this should be your number one concern when searching for an investment property.
Tip #2: Consider Growth Potential
The growth potential of the area is another important factor to consider. Future development plans can be found at the local council. When considering growth potential, look at future expansions for the infrastructure as well as employment growth opportunities. The more employment opportunities available in the area, the more likely people will want to purchase a property in the area. Keeping an eye on news articles will give you a better idea of what companies are planning projects in your area.
Tip #3: Know Your Target Audience
Whether you are planning to rent the property or flip it for a profit, it is important to know your target audience. This way, you will have a better idea of what type of property to purchase. If you are considering purchasing property in the inner city, for example, your primary target audience is likely to be professionals. Therefore, a two bedroom apartment is likely to be in greater demand than a multi-bedroom home. By purchasing the type of property that is likely to be in the greatest demand, you will increase your chances of profiting from the property.
Tip #4: Consider the Local Market
Even if you have found a beautiful property in a great location, you are not likely to make a profit on the property if the market is saturated. Therefore, take the time to find out more about the number of properties that are already available in the area. If there are already many vacant properties in the area, you are not likely to profit from your purchase any time soon.
Tip #5: Look for Something Special
To increase your chances of getting your property rented or turning it over, you should look for a property that has some of the most desired features. Features that most home buyers and renters are looking for include:
It is also important to note that properties with two or more bedrooms should have at least two bathrooms and large apartments with more than two bedrooms should have internal laundry facilities.
About The Author: Eric Bramlett is the broker & co-owner of One Source Realty in Austin, TX. He specializes in Austin real estate and Lake Austin homes for sale.
