3 Tips for Finding the Best Investment Property for Your Budget

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 to invest in real estate. However, not every property issuitablet for investment. Finding the right one that meets your goals and budget is important.

In this PropertyTalk blog, we are focusing on investing in residential real estate. Keep reading for three tips on how to find the right investment property for your strategy, which may include:

• Renovate to sell
• Buy to hold

Generally, first-time property investors choose the buy-to-hold and rent strategy. The aim is to secure good tenants paying market rates while you hold the property for years. At some stage, you will sell it when the property has gained a lot of value, and you have plans to use the capital gain. The other strategy is buying a fixer-upper. These properties need work to make them habitable and attractive to future buyers or renters.

1. Don’t Buy a Fixer-Upper

While buying a fixer-upper and transforming it might look fun, it’s not a good idea for your first investment property unless you are a builder and can do much of the work yourself. Renovations take a lot of time, and they take a lot of money too.

Cosmetic changes like painting, new tiles, and 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 electrical. Those will need expert, outside help and will be a money sink.

If you want a property with 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, living in and maintaining that property gives you much 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, 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 can’t get emotional – focus on the numbers. Do the numbers add up?
It’s different when purchasing a family home, as that’s where you’ll live and raise your family.

Investment properties need a logical decision. It should come down to getting the best investment return for your budget. This can be 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 ensure the financials make the final call. Investments are about making 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, crunching the numbers is even more essential. 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 must stay logical, pick the right house price to income ratio and make intelligent choices.

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