So you’ve heard about real estate and how it’s a reliable option to grow wealth. And now you’re looking to foray into the real estate investment world. As you already know, every business has its intricacies, and real estate is no exception. To excel in this industry, you need to have a keen eye not just for nice-looking properties but for those with a good bargain and high market value. It would also help if you were sure of what you want by doing your research before buying any rental property.
The type, size, location of a house, and other related factors require serious consideration before making any purchase. However, once you’re armed with vital information finding the right deal should be easy.
With that said, let’s look at 8 most important things to consider before buying your first property.
1. Visit the Neighborhood
Forget the internet and online shopping, the purchase and sales of rental property is still typically done the old-fashioned way. You’ve got to be there to see and assess the property’s value physically. What’s more, when you visit the neighborhood where the property’s situated, you get to find out certain things that you won’t ordinarily notice.
For example, visiting a place can help you know the town inhabitants’ average income and whether they can comfortably afford your property’s rent.
2. Be Aware of Property Taxes
It would be best to be wary of hidden taxes because the amount paid in taxes can quickly accumulate when summed together. Sometimes, the property tax in a neighborhood could be unnecessarily excessive and may not bode well for a profitable investment. However, if the property is in a high-brow area and the rental income from long-term tenants is sufficient to offset costs and still guarantee a profit, then you could go on with the purchase.
You can find out about tax-related issues by discussing them with the municipality tax department. Sometimes, homeowners around can give you factual information about tax fees.
3. Consider Job Availability
Generally, any place with lots of companies and commercial activities attracts many young people and families. Additionally, this group of people is mostly long-term tenants, which augurs well for homeowners.
Considering buying rental property in such areas is a good option, especially if there are not enough rent properties, leading to increased prices. What’s more, costs may further increase if the companies situated around are high-flying and offering juicy compensations for workers.
4. Appraise Social Amenities’ Quality
A neighborhood with good social amenities is likely to attract more tenants, thereby increasing properties’ cost. Some of the questions to ask yourself about: Is the public transport system sound? Are there enough entertainment options like spas, cinemas, parks? Are there health facilities with standard equipment? Do you think you can live as a tenant in such a neighborhood?
Checking the quality of social amenities is even more critical if you’re considering a vacation rental. If you’re seeking more information, you can check the best place to own a vacation rental article.
5. Be Informed About Crime Rate
One essential factor to consider before buying any rental property is to ascertain the towns’ security level. How’s the crime rate in the neighborhood? You don’t want to own a property with tenants fleeing every four months because of repeated burglary coupled with the constant worries and headaches of replacing doors and windows.
The best way to guarantee peace of mind is to only purchase a house in a neighborhood with a low crime rate. You can visit the local library or police station to find out the crime statistics in the area. The internet is also an excellent place to start.
6. Know the Master Plan
Most real estate investments, if not all, are mainly long-term investments. Investments that span several years are mostly subject to elements that eventually affect their price and value. Before purchasing any rental property in a town, especially one that’s rapidly developing, you should be familiar with the overall city plan. “Why concern myself with urban and regional planning,” you might ask.
The truth is, knowing the town’s master plan will help you understand the future constructions and future development of the area. For example, purchasing a property just a few blocks away from land earmarked for an ultra-modern market may be a brilliant move; when completed, the rent cost within that area will increase. A visit to the municipal sector in charge of that town’s planning should equip you with all the information you need.
7. Observe the Vacancy Rate
If you’re looking to own a house where you can charge a high rent, then you must buy from a place with a low number of vacancies. While not insinuating that a location with many house listings is a red flag, it’s advisable to err on the side of caution and find out why. Could it be that the area is fast developing and housebuilding is on the rise? Or, could it be that there’s a ton of already existing houses with not enough people moving in.
Although there are exceptions, the general rule of thumbs is that the more properties for rent in a location, the lower the price. Therefore, try to get a rental in an area with a reasonable number of properties and vacancies.
8. Look Up A Location’s Disaster History
Some locations in the world are prone to natural disasters. Purchasing property without prior investigation of a location’s natural disaster history can be detrimental. For instance, purchasing a vacation rental property on a beach sounds like a good idea until a flood comes and washes everything away. Earthquakes are another natural phenomenon to look out for when buying a house.
So before buying anything, you should look up the disaster history and know the best places to own vacation rental property.
Conclusion
The real estate world offers bountiful opportunities for business persons, homeowners, and realtors. Getting the right information and help is the first step to a successful investment in this field.
