Real estate investment is a great way to secure your finances and start increasing your retirement savings. Property is also a great asset to have because you can sell it in the future for a large lump sum should you need the money.
However, the buzz around real estate investing leads some people to think that it’s a lot easier than it actually is.
It’s not just a case of buying any old property and waiting for the money to roll in. If you’re going to make some real money, it’s vital that you choose the right property.
That’s often easier said than done and a lot of first-time investors make mistakes and end up stuck with a property that is difficult to rent out or doesn’t really appreciate in value that much.
If you’re thinking about investing in a property soon, here are a few tips on finding the perfect place.
Consider Property Niches
A lot of people get it backward when they’re investing in real estate.
They’ll choose the property first and then start looking for the right tenants to fill it when what they should be doing is thinking about the tenants first and then finding a property that suits them, that’s why you should think about property niches.
For example, if you buy a 2 bedroom house with a big garden in an area that is mainly populated with young working professionals, you’re going to struggle.
Those kinds of people won’t be bothered about having space for a family or a big outdoor space, they’re far more likely to rent a studio apartment instead.
It’s important that you research the different demographics in the area and think about who you want to rent your property out to, and then find a place that suits your tenants.
Look For Ongoing Developments
If you can find an up and coming area that is going through a lot of development, buying a property there is always a good idea.
You’ll have more people wanting to move to the area as it becomes more popular which means no shortage of tenants and the value of the property is likely to increase a lot as the area becomes more desirable.
If you follow people like Roger O’Steen and the PARC group who are working on large developments, you could get in on the ground floor and find a property with a lot of potential.
This is a far better move than buying in an already established neighborhood because the prices will be higher and there is more chance that the area will fall into decline in the next few years and property prices will drop.
Research Surrounding Property Prices
The easiest way to know whether you’re making a good decision is to research the surrounding property prices.
If you look at how they’ve changed over the last couple of years and what kind of prices properties are selling for at the minute, you’ll get an idea of whether your investment is likely to appreciate in value or not. If you don’t do your research before buying, you can easily make a bad decision.
Follow these 3 rules and you’ll be able to find a good real estate investment that brings good returns.