Without experience, it can be hard to determine how to choose the right investment property for you. You want affordability, but you want the maximum return on your investment. There’s a sweet spot just for you, but finding it can be exhausting and overwhelming. That’s where Turnkey Properties can help.
Our experienced team has compiled some tips on choosing the right investment property to give you the confidence to get started on your next investment in no time. Combined with our unique turnkey process, we can help you own real estate in the Memphis, TN, and Little Rock, AR, areas without forcing you to acquire, rehab, finance, or manage the property. Let’s get started!
What Makes it the “Right” Investment Property for you?
It can be hard to know if you are making the right decision. What’s worse is getting through the purchase process of what should be an exciting and profitable investment opportunity only to feel like you didn’t get such a deal after all, or “buyer’s remorse.” A property is generally considered “good” or “right” when it meets your expectations.
When considering ways to increase your chances of finding something that won’t leave you second-guessing your choice, look for properties that are listed well below the market price, are in a good geographical location, and are in relatively good condition, meaning it needs no major work and there are no sanitation issues. These factors can help you determine whether the property is suitable for maximizing rental yields.
The Basic Steps of Finding the Right Investment Property
You can’t rely on luck, though, many a “right” investment property has been acquired with less work than willpower alone. Since that’s not quite a process that can be defined and practiced, we recommend having your own plan in place at least to know what the end game looks like for your potential property.
Define your Needs
The first step of any purchase should be considering your needs for the purchase to help you establish your search criteria. A few good criteria to consider before getting started on your actual property search are
- The area or neighborhood
- The size of the property (Square footage, bedroom/bathroom count)
- The condition
- Your preferred budget and your borrowing budget
Figuring out the basics of what you are looking for will help you better narrow down your search results and avoid wasting time on properties that wouldn’t be an ideal fit for your needs.
Establish a Search Strategy
There is an app, a website, and a company out there to help you find anything you are looking for, but sometimes finding the right investment property for you can require thinking out of the box. While setting your searches to notify you about new listings in key areas or price ranges, don’t hesitate to also get out in the neighborhoods you are interested in and talk to some of the people currently living in the area. Leaving your information with someone who decides to move a year from now could result in an ideal investment coming to you directly.
Be Patient.
Buying property isn’t typically a process that is completed in a short amount of time. Finding the ideal investment can come with delays that can’t be expected and even lost sales that fall through when all seemed good to go. Don’t let obstacles or the timeline get you down. A determined investor will find the best deal that fits their wish list so long as they are patient.
Questions to Ask for Potential Investment Properties
Once you have determined that a potential property meets your preferred criteria, you should ask a few questions about the home’s history.
How long has the property been on the market?
How long the property has been on the market is typically one of the first questions you will consider when considering any investment property. That amount of time can give you a lot of information– Just listed? The price might be a bit inflated. On the market for a while? There might be something wrong with the property. Either way, identifying the listing timeline can give you a heads-up on your expectations and help you negotiate a better price.
Why is the property being sold?
Asking why the property is being sold might feel a little invasive, but the reason (or reasons) for selling the home could give you an advantage when making your offer. Homes that need more work or updating may be listed for less, and the seller may be willing to make concessions or negotiate to offset some of the work required.
What is the age, and when was the property last sold?
Knowing the age of the home and when it was last sold can help you assess the value and get an idea of whether it is likely to need any work. A property that was established 15-years-ago will likely need more repairs or updating than a property built in the last five years.
When were the major components repaired or replaced last?
As a supplemental question to the one just above, asking when the major systems like the roof, HVAC, windows, and so on were last repaired or replaced can provide a lot of insight into your potential investment. Newer repairs or improvements will obviously be a plus for you but will likely raise the price. While on the contrary, an old roof could be hiding damage to the walls, ceilings, and floors that could be costly. Knowing when the major components were last addressed can also give you a better idea of where you should take a closer look when touring the property.
The Right Investment Feels Good with Turnkey Properties!
Finding a good deal that feels right is possible, but it requires a proactive and patient investor. At Turnkey Properties, we’ll get to work, so you don’t have to. You’ll find everything you need to invest in a rental property, all in one place. Schedule an introductory call to learn more about who we are, what we do, and how we can help you maximize your cash flow investments with Turnkey Properties.