5 Considerations When Buying an Investment Property

Making an investment property purchase can be an incredible choice for you and your portfolio, but it’s not something to rush into without first taking stock of your finances, goals, and the state of the current market. Read on to learn some of the biggest factors to consider as you embark on your exciting investment journey.

Have A Full Understanding of Your Finances

An investment property can reap incredible rewards for its owner, but I advise all of my clients to speak with a trusted lender or advisor to get a clear picture of where their finances are and if they’re in a stable enough position to take on this new venture. If you’re not sure whether or not it’s feasible, you’ll definitely want to reach out to a savvy professional before going any further.

What will the ROI be? And will it be worth it?

ROI, or return on investment, will determine how much you’re going to receive against how much the property has cost you. Clearly, this will be a very important piece of information to calculate before you make any purchases. If the property is a major fixer-upper, you may be getting it for an incredible price but you’ll also have to factor in extensive repair costs when comparing the final cost figure to the potential return number. Once you have an idea of the ROI, decide if the time, money, and labor that will go into the property make it worth it.

Do You Have the Time?

Managing the purchase, ownership, and sale or renting of an investment property takes time. Even if you have a talented team of professionals helping you out, it will still require you to dedicate some of your time and focus to the project, particularly if it’s your first. If you’re planning to rent the home, consider the duties that accompany becoming a landlord. Is this something you’ll be taking on yourself? Or will you hire a management company? These are all important questions to have firm answers to as you plan your future.

Location, Location, Location

It’s one thing to find an incredible property to purchase, it’s another for it to also be in a location that adds to its value. It’s crucial to understand the local real estate market of where you’ll be purchasing, so you can get an idea of your ROI potential. But you should also consider things like the property’s proximity to schools, restaurants, job opportunities, etc. These are all factors that will sway future renters or buyers when they’re deciding if they want to move to the neighborhood.

A Trusted Realtor Can Make All the Difference

Lastly, a knowledgeable, experienced realtor is an invaluable resource to have on your side. At The Sessoms Group, we know how important any real estate purchase is, and when it comes to investment purchases, there are plenty of components that our clients may not be familiar with. We’re here to guide you, inform you, and make you feel one hundred percent confident and secure in your next venture.