What Makes A Good Investment Property?
- Written by News Company
Most people use their savings to invest in shares, stock markets, properties etc. In this article, we are going to tell you about the essential things to look out for when buying an investment property.
Investing in properties are more likely to be of great benefit to you when you choose them wisely. These properties will provide you with high returns in the form of rental yields and capital growth. Whether you buy property in rural areas or the main city district, the factors that affect your buying decision remains the same.
Below is a list of a few things you should consider in your decision making cycle:
Beginners Guide To Investing In Properties
1. Picking The Right Phase To Buy
Just like a normal economic cycle, the property cycle has the boom, the slump and the upturn. The boom is a period when there is a massive hike in prices because the demand is higher than the supply. This period is an excellent time to sell your property as buyers keep outbidding each other to buy your property.
The slump is the opposite of the boom. This period is the buyers’ market because of an increase in supply while the demand is limited. This might be a good time to buy the property, although the property won't bring you immediate returns as the market is down and the rental prices are on a low.
This period makes it difficult for buyers to access money without having to borrow money, which would have its own cost. When borrowing money, you would also need to have a solicitor’s certificate with you.
The upturn is the phase between the slump and the boom. This is the best time for an investor to buy a property because properties are sold at a reasonable price, and the returns are profitable as well.
It is therefore essential to research the market and to choose the right time to buy the property in which you want to invest.
2. Picking The Right Property
Picking the right property involves choosing a property that has the most potential for capital growth. It is always preferable if the property continuously has high demand by the tenant and the future buyer. This is the best time for an investor to buy a property because properties are sold at a reasonable price such as Ross North Homes, and the returns are profitable as well.
It is essential to choose the right location to choose the right property. The right site is close to shopping markets, public transportation, public facilities, schools etc. You would, therefore, need to do thorough research of the demographics of the property.
3. Does Work Need To Be Done on The Property
While deciding to buy a property, you should also consider how much extra cash you would have to spend on the property. You should ask questions like, does the property need to be restructured? Will the reconstruction be worth it? Is the extra investment going to attract tenants? Will you receive a higher rent by improving the property?
After asking all of these questions, if you still feel the property is going provide you with high returns, you have just found the right investment property.