How to Choose the Right Property for Your Needs

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Everyone talks about how profitable it is to invest in real estate. And yes, if you make the right choices at the right times, it most certainly is! But it’s not guaranteed. You need to do your homework, a lot of research, and be prepared to either work very hard at maintaining your property, or hire a good residential property management company. This is not a case of buying a property then just sitting back and letting the money roll in. Investing in real estate is a serious commitment.

Whether you’re a first time real estate purchaser or a seasoned veteran, here are some tips that can benefit both of you:

Buy Within Your Budget: This decides which areas and in some cases, what types of real estate you can invest in. To nail down your budget, make an appointment with a lender or mortgage broker and get pre-approved. Then it’s smooth sailing.

Your Price Range: This will depend on whether you choose to manage the property yourself or hire a real estate property management company. You’ll need to add in additional costs if you choose a management company (but you’ll save yourself a lot of headaches & money in the long run!).

Type of Property: Houses, duplexes, low rise or high rise buildings, condos, townhouses, open land…it all depends on what you can afford, what you would feel comfortable with, and whether you plan to handle the property yourself or hire a real estate property management company.

Where to Buy: If you plan to manage your own property, try to find something close to home. If a furnace breaks down in the middle of the night, it’s easier if it’s only a 10-15 minute drive. If you plan to hire a residential property management company, distance doesn’t matter as they’ll handle everything for you.

Investment Area Options: Make up a short list of areas that fit into your price range, and suit your management choice. Call up and talk to agents in those areas to find out what is available to buy that fits into your budget.

Do Your Research: Once you’ve decided on the area you’d like to buy in, check out the prices of homes that have been recently sold in and around that area. This gives you more information on a property’s value and what people are willing to pay.

Do In-Depth Research: Especially if you’re considering buying real estate in an area you’re unfamiliar with. You can get a lot of information on more than price from lenders and mortgage insurers. They usually have a lot of valuable data on different locations and property developments. You can also check with the local police regarding crime statistics.

Match Property to People: The property you invest in should meet the needs and demographics of the renters in that area. Near colleges and universities, property with lots of bedrooms would be in demand. A house with a big yard close to schools and parks is best suited to families.

Property Age & Condition: If you need to replace a roof or furnace within the first few months of ownership, that takes a major bite out of your profits and can derail your cash flow. Before you purchase anything have a professional building inspector thoroughly check the place over so you know what you’re getting into.

Big Local Changes: Are there any big plans in store for the area you wish to purchase in? Check with your local council for this kind of information. If major long term construction is planned it may be hard to find or keep tenants. However, if you’re looking at light rail transit or a by-pass coming in, you may see the value of your property increase sooner than expected!

If this is your first foray into investing in real estate, a good start might be a house or a condo. Condos are basically low maintenance outside as the condo association handles all that. You just maintain the interior. In the case of a single family house, it usually attracts long-term renters like couples and families. With two adults there are usually two pay cheques coming in so they’re more likely to be financially stable and pay their rent regularly.

Either way, the tips we’ve offered should be of some help to enable you to buy the property that’s best suited to you. When you’re able to, hire a reputable real estate property management company to handle it all for you…and then you can sit back and watch your investments grow!

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