Owning a piece of investment real estate can be a fantastic way to increase your monthly income and build long-term wealth. Through increasing rental rates, annual tax deductions, and appreciation of real estate values, investment real estate owners build a lot of personal wealth over time. While owning investment real estate can be a great option, picking the right property can be a challenge. Fortunately, there are several tips that you can follow to ensure that you earn a great return on investment.
Assess Market Needs Thoroughly
Whenever you are looking to make an investment in a real estate rental property, you first need to completely assess the market needs for rent. One of the best ways to do this is to study current listings for other rental properties for rent. This will give you a great idea of what the local competition looks like, how many properties are available, and what asking rents are. Based on this information, you can figure out the market rental rate and factor it into your personal budget.
Consider Student Housing
When you are looking at different property types to invest in, one great option would is to invest in student housing. While most college campuses have a lot of on campus dorms, there is always a demand for off campus housing that is near the campus. For example, FSU off campus housing tends to have a very high occupancy rate and sees rates increase greater than the rate of inflation. Furthermore, you will often receive a lease guaranty from a student’s parents, which provides you further economic security against late rents or damages.
Property Condition Assessment
When you look to buy a property, one of the most important reports that you need completed is the property condition assessment. The property condition assessment is a report in which a property examiner will look at the home and determine the condition of the property. The examiner will be able to review all aspects of the home and be able to tell you what repairs are necessary, what the repair costs will be, and if there is a need to complete any additional analysis. These reports can be used to help make a decision about whether the property is truly a good investment, or if there are glaring expense repair needs.
Another key factor to consider is whether the location is improving, declining, or staying stable. You should determine what future demand drivers are coming, or leaving the area. These would include changes in public transport or amenities, changes in employment opportunities, or any other factors that could influence real estate prices.
In conclusion, investing in real estate investment properties can be a terrific way to build long term wealth and increase your income. While real estate investments can be very profitable, the success of a project will depend on the property you select. To ensure that you pick the best property possible, there are several different tips that you should follow.