4 Ways to Spot a Great Real Estate Investment
Many young people who would like to get involved in the real estate industry have plunged into an investment without properly researching the property. What they hoped would lead to an infusion of cash and the beginning of a bright future in the real estate business would bring financial ruin simply because they did not take the time to do the research and consider the criteria. There are a few simple aspects to a piece of real estate that every professional and investor will need to know.
1 — Management requirements.
There will be very few properties that will not need a little bit of work. Most real estate will need some work put into it. But if you have long-term tenets, you need to ensure that you do not have to constantly fix different things. A property that is likely to cause a lot of problems for tenets is going to cost you more money. A tenet moving out due to constant repairs can be costly. If a property is high maintenance, it is probably not going to be a worthy investment and the wise real estate professional will turn their attention to a different property.
2 — Consider the neighborhood.
There are some homes that are beautifully crafted and architecturally optimal, but they still would not serve as worthy investments. This is because of the neighborhood. Tenets are not going to want to move into a crime-ridden neighborhood. Even if one house looks nice, tenets are going to be repelled by a trashy neighborhood. Location matters just as much as quality. You would not buy a beautiful mansion if it was located on the bottom of the ocean, would you?
3 — Ensure that it has low property taxes.
Even if you have found that quality home in a good neighborhood, consider the property tax. You might lose most of your financial gain to property taxes. High property taxes are usually only acceptable if there is high rent, and you might not be in a position to charge that.
4 — Natural disasters.
How vulnerable is your property to tsunamis, wildfires, or flood damage? You might have to pay very high insurance premiums or suffer future damage payments. A wise investor would consider a property that was far outside of the danger zone so that they would not have to be burdened by this.
Gennady Barsky is a real estate mogul from NYC.