So, what is investment property? Is it only property you buy to rent out and not live in?
Every single piece of real estate should be an investment… even your own home! Many years ago, my very wise dad told me “Buy real estate; there’s only so much of it.” and he was right. An investment is something that has the potential to appreciate in value and real estate almost always fits the bill.
Here are a few things to always consider when buying real estate:
- For example, is it next to a railroad track or a park? Is it close to a large job source? Is it conveniently located for daily routines? Is it in an area where the schools that apply are coveted? Are you at risk of large city assessments for improvement projects?
- Does it have a steep north-facing driveway (especially if you live in a cold climate)? Is there a steep hill in the back yard or is it too small for a garden or play set? A small yard can be a positive to you (if you don’t like to mow!) but the average buyer wants to own more land rather than less. Are there covenants limiting the exterior clutter of neighbors? Are there covenants that limit adding a storage shed or fence?
- Is the layout funky? For example, do you have to walk through a bedroom to get to another bedroom? Is the living room too small for a sofa and easy chair? Is there a lack of easy flow through the home?
- How does it compare to other homes around it? Is it the largest home in the neighborhood? Is it the most expensive (or least expensive) home in the area? These factors can put a ceiling on your potential profit upon sale.
- Buy to Sell
- If there is something quirky about the property that buyers won’t want when it’s time for you to sell, maybe it’s not the right investment to make. When buying any real estate, personal or investment, you need to buy it to sell it. Buying to sell means looking at the property through YOUR buyer’s eyes (or the majority of buyers and what they tend to like). Believe me, there will be a home that makes sense for you, and is an excellent investment for you and your family’s future!
We need to explore “exit strategy” further; which happens to be my next blog, coming soon!