Investing in property may be one of the most practical ways to build wealth. While it can be time-consuming considering the many options involved, the truth is you don’t need to be an expert to find a great investment property. To make better property investment decisions, consider the following tips:
- Look At The Job Market
Properties in locations with high employment opportunities attract more occupants. An excellent example of this is London. New builds in London present a lot of options for you, especially considering it has become the most populated city in the United Kingdom.Â
A quick way to watch the job market trend in a locality is to look out for big companies relocating to the area or startups establishing their business in the vicinity. With this, you can be sure that people will start moving into the area, too.Â
- Determine Management
Property investment is not entirely passive. You need to know the amount of work that goes into managing one and decide how to handle it. Can you manage tenants, the property condition, and finances? Take your time and learn what it means to manage a property. If you find that it’s not something you can handle, you may consider hiring an agency to manage it for you.
- Understand The Location
Location plays a crucial role in how profitable your investment turns out. A property that’s around a university is likely to attract more students, and that means you may be sourcing for new occupants every three to five years. However, depending on cash flow goals, such a location may be a lousy investment option for somebody else, but a good one for you or vice versa.
- Consider Crime Rate
One of the challenges in property investment is the crime rate. A thriving location may turn out to be the worst to invest in if the crime rate is considerably higher compared to other areas. You can get the crime statistics of a particular locality from the local police or public library. Some of the things you should check for should include the frequency of police presence within the area, the incidence of petty and serious crimes, and vandalism. These are sound property management issues to consider before investing.
- Consult NeighborsÂ
It would be best if you also listen to what occupants in the community are saying. You may get more reliable information from them than from the public library or other sources. They have been living in the community for quite a while and as such, they have a first-hand experience of the pros and cons of staying in the area.Â
- Check Property Taxes
Property taxes vary widely from location to location. And it may be one of the ways you could lose a lot of money. This is not to say that you shouldn’t pay property tax. The point is, in some locations, the property tax may be so high that you’ll end up barely making a profit.Â
You can get information about tax rates from the municipality’s assessment office. Or you may also reach out to homeowners in the neighborhood and ask them about it.
- Check Length Of Time On Market
How long has the property been on the market? If a property has been on the market for several months or years, be sure to find out why this is so. It may be that the property is too expensive due to substantial renovation expenses. However, the upside of a property that has been on the market for a long time is the seller might be more willing to negotiate and settle for a lower price.Â
You may also ask the seller when the property was bought and why it was sold. The response you get will guide your investment decision.
- Educate Yourself On Rental Law
Various laws regulate the housing sector, and being oblivious of them may affect your investment negatively. You may consult an attorney to get a better understanding of your rights and that of your tenants. Knowing the basics of property law is crucial to finding a great investment property.Â
Conclusion
Property investment is the kind of investment you may never regret if you do it right. If you feel the task of choosing a suitable investment property is too much for you, hire an agency to do the job. Nonetheless, if you want to do it yourself, choose a thriving locality, check out the crime rate, property tax rates, and the job market. Also, find out how long the property has been on the market, and be sure to educate yourself on both state and federal laws regulating the housing sector.
