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3 Tips for Finding the Best Investment Property for Your Budget

real estate investment

Are you looking to get into property investment?

With the global property investment market hitting $10.5 trillion in 2020 it’s a lucrative opportunity. But not every property is right for investment. It’s important to find the right one for your budget to make you a passive income or a profit.

That’s where we can help! Keep reading for these three tips on how to find the right investment property for your budget.

1. Don’t Buy a Fixer-Upper

While it might look fun to buy a fixer-upper and transform it, it’s not a good idea. Renovations take a lot of time, and they take a lot of money too.

Cosmetic changes like painting, new tiles, new flooring shouldn’t put you off. Those are easy and cost-effective ways to spruce a place up and make money.

What you should avoid is any structural work. You also want to stay away from core renovations like plumbing and electricals. Those will need expert, outside help and will be a money sink.

If you want a property that has higher monthly payments, consider “house hacking”. This is where you live in the property for a year by either getting a duplex or a family home and splitting it. By going for the roommate option, you qualify for non-investor interest rates. You’ll also have access to FHA mortgages.

Also, by living in and maintaining that property, you get a lot of experience. You know how much its long-term upkeep is, and you gain insight into what having tenants will bring to the table. It’s a vital lesson in investment property management.

2. Look Outside Your Initial Chosen Area

When looking for an investment property for sale, consider looking further afield. Some property markets are more uneven than others.

Check the area’s home price to income skew. If it’s too high, then it’s the wrong place to invest. Even if those coastal views are to die for, you won’t be able to charge a high enough rent to cover costs and make a profit.

Consider a turnkey real estate flip or rental property investment further afar. It’s easy to do from a distance now, with virtual tours, instant video, and a great realtor in that local area. But that local realtor is a must, as they’ll be viewing that property on your behalf.

3. Take Emotions Out of the Decision

Buying an investment property is all about economics. You can love doing it but you can’t get emotional – just focus on the numbers. Do the numbers add up?
It’s different when you’re purchasing a family home, as that’s the place you’ll live and raise your family.

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Investment properties need a logical decision. It should come down to getting the best return of investment for your budget. This can be a little trickier if you’re going down the house hacking road.

Keep in mind this will be an investment in the long run. An excellent general rule is to let your heart and emotions have a say, but make sure the financials make the final call. Investments are about making your money make money so you need to make a profit and it needs to be more than you’d make if you left your savings in the bank!

Finding an Investment Property Made Easy

So, there you have it! Now you know these tips for finding an investment property, you’re sure to get the right one.

When you’re on a budget, it’s even more essential to crunch the numbers. There’s not a lot of room for mistakes, and even one could see the project become a failure and your money lost. That’s why you need to stay logical, pick the right house price to income ratio and make intelligent choices.

If you found this article helpful, be sure to check out our other blog posts today!

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