When it comes to lucrative business opportunities, few are as promising as real estate. Because there are so many types of properties and preferences out there, investors have a wide range of directions they can take.
With that said, however, there are some real estate investing tips that are worthy of consideration. Whether you are brand new to the arena or you are well on your way to being a real estate tycoon like Stefan Soloviev, it never hurts to think things over a bit more. Before your next purchase, be sure to keep these points in mind.
1. Investment Purpose
Prior to making any investment decisions, it is always useful to ask yourself what the purpose of your purchase will be. While there is no right or wrong answer, there are numerous options to think about. For example, you can buy and self-use a property, buy and lease or buy and sell.
2. Property Location
Another important consideration when investing is the property location. Take a look around the place and note its surroundings. Are there nearby attractions that give the location more value? On the other hand, maybe the value is in the property’s isolation. Location can mean different things for different investments.
3. New Construction or Existing Property
Depending on your goals, something else to think about is whether you want to invest in an existing property or a new construction. With a new construction, you have the advantage of controlling the entire design from the beginning, however, existing properties can offer unique charm and character from their histories. Plus, you do not have to start fresh.
4. Property Valuation
Property valuation also matters. One common real estate valuation approach is doing a sales comparison between comparable properties of recent sales. Other methods include the cost approach which subtracts depreciation from land and construction costs and the income approach. With the income approach, expected cash inflows are the focus.
5. Overall Real Estate Market
A final investment tip to remember is that it never hurts to stay in the loop about the overall real estate market. Doing so can give you a better understanding of what to expect. For best results, keep current with statistics and trends for home prices and sales as well as mortgage rates, flipping activity and foreclosures.
Buying real estate is not something you should do on a whim. By keeping these considerations in mind when investing, you can have a more financially rewarding outcome.