Sophisticated real estate investors know that there is a lot of background research to fully understand the market value–and potential–of any given property. Even if all of your investments are located in the same city, there are variance in neighborhoods and even certain streets, that can affect your ability to get a solid return on your investment. Here are some of the top ways to assess a location’s potential and whether a listing would make a good addition to your real estate investment portfolio:
- Mortgage Interest Rates
When interest rates are low, there will be fewer renters and more first time home buyers. This often–but not always–means that prices will move up, especially in areas that tend to attract that type of buyer.
- Up and Coming NeighborhoodsLook closely at the type of homes in a potential area. Is there a mix of run-down homes and well-kept, recently updated houses? This is a sure sign that the neighborhood is ready for a boost in property values.
- Sweat Equity
If you are choosing between two investment properties, pick the house that is more solid, with regular maintenance updates, and requires more cosmetic, rather than structural work or big-ticket repairs. You are much more likely to get a better return on your kitchen upgrade or new hardwood flooring than replacing a roof.
- Understand the Value of Good Marketing
Whether renting out or selling your investment property, knowing how to market your property well will give you a much better return. Staging, lighting, good photography, well-written descriptions and strategic use of online marketing channels are all essential for getting the word out there to the renter or buying who is willing to give you the most bang for your buck.
We work closely with many real estate investors to make sure that their portfolio is properly financed and positioned for growth. Once we’ve laid out all your options, all you have left to do to grow your wealth is choose which house will be your next investment!