Whether you’re trying to find a way how to invest 200k or just looking for a nice retirement option – it’s vital that you do your research.
Here are some things you should know before making a property purchase.
Where to find the best properties
Because many properties are listed in multiple places, you can find yourself in competition with a lot of other potential buyers. However, if you choose Compass to search for a property, some of their listings are exclusive and have fewer interested parties. If you know what you want from an investment property, they can also help you narrow down your search. You can find out more about Compass Real Estate in this article.
The best location
Finding the best location to buy an investment property will mean it will attract more interest when you decide to sell or rent it out. Of course, this means you have more competition when making an offer, but if you can find a property with lots of potential in a sought-after area, it may receive fewer offers, because people looking for a home may not want to do a lot of renovation work. If you do this work yourself, then sell it on, you could make a big profit.
What to look for in a property
Besides being in a sought-after area, the property itself should be in a good condition, even if you foresee lots of work to make it better. Any damage to the construction can be costly. If you have any specific skills, you could save money by using them to work on the property. This will save on the costs of hiring outside help.
Although you will get the property evaluated, it’s your investment, and it doesn’t hurt to be thorough when viewing the property by checking for any potential problems. These could end up costing you more than you are prepared to spend.
The property’s value and the potential to make you money
Make a detailed list of essential work. Ideally, this should be minimal unless you have the skills to do a lot of the work yourself. Then list the work which is non-essential but can raise the value of the property. Set realistic costs, and calculate whether this will give you the chance to make a profit. Get an expert opinion if you need to. This may save you from losing money in the long term.
Look at local data
Use local data to look up crime rates and compare this against other areas. If crime is significantly higher than in other areas, you may struggle to resell your property. Also, looking into any positive changes and plans could show you whether the area is improving. If money has been invested into the community, the property might rise in value later. Buying it now and waiting could result in a higher profit margin.
Although investing in property isn’t for everyone, it can be rewarding if you discover you have a talent for picking the right properties.