What Are The Signs Of A Good Investment Property?

Many people nowadays are diversifying their revenue streams by buying investment properties. But what is an investment property? Well, any property you purchase with the goal of generating revenue is an investment property.

You may be looking to buy a property that’s appreciating in value or a home that can provide a rental income. While there’s no set formula for determining what makes a good investment property, there are multiple factors for you to consider.

Here Are Three Important Facts Of A Good Investment Property

1. Excellent Location

The right location is critical when determining the viability of an investment property. For example, properties located near universities and colleges are most likely to attract student renters. Although there’s never a shortage of student tenants near a place of higher education, such renters may be unreliable.

They may fail to pay rent on time, damage your property, partake in ill-advised activities, or suddenly break contractual obligations. Additionally, such locations may stay vacant during the offseason.

High vacancy rates are quite problematic for a rental property. A home without occupants for a certain amount of time may be subject to a Vacant Home Tax. You’ll also be paying all expenses out of pocket until you find a tenant.

When investing in a full-sized home, purchase a property near top public schools. Such homes will be in-demand all year round from reliable families. Generally speaking, properties in neighbourhoods with excellent schools also appreciate value.

In addition to schools, please also check the quality of amenities in the area. A neighbourhood with excellent parks, transit, libraries, clubs, and shopping facilities is likely to have homes that command higher rental rates.

For example, according to the best Lawrence Park realtors in Toronto, Canada, the neighbourhood offers top schools, tennis courts, a library, restaurants, and much more. Investing in such a neighbourhood can help you create a rental income. Your home should also hold or rise in value as a long-term investment.

Finally, check the crime rates in the location. Homes in unsafe neighbourhoods can be more challenging to resell or rent out. Moreover, vandalism can impact your maintenance costs and home insurance rates.

2. Good Condition

You must carefully factor in the property condition when buying an investment property. The ideal home should be livable in a short period of time with less investment in repair, maintenance, and upgrades.

Please also don’t ignore homes that can escalate dramatically in value with some cosmetic enhancements. However, do the math for a home that needs significant upgrades. Not only will it cost you money, but time. Whether these costs are worthwhile depends on the asking price of the home.

3. Positive Market Analysis

Market analysis is essential when judging a property’s future. A property close to the downtown core of a bustling city is a good option.

Properties near transit systems or close to the business district will also attract quality tenants or buyers. Please also check the average rent in the area. Unless you’re collecting enough, you may have to pitch in for your mortgage after paying taxes and upkeep costs.

When looking for an investment property, crunch the numbers and look at multiple factors. Work with a top realtor to find an excellent option in real estate.

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