7 Boxes to Check to Ensure Your Buying Healthy Real Estate Investments
7 Boxes to Check to Ensure You’re Buying Healthy Real Estate Investments
With interest rates so low, many are thinking of investing in real estate. Do you know what makes a healthy real estate investment? Whether you are planning to fix and flip, buy and hold, or rent, here are 7 boxes to check to ensure your investment is healthy.
Population Growth
Examine the population growth statistics for the area. Has the area been growing, declining, or staying the same? You want to invest in an area that had good growth statistics and potential for future growth.
Job Growth
Job growth and population growth are usually linked. Look for an area with positive job growth, as well as an area that is diversified in industry. This will ensure stability even in the face of the loss of some industry. Check out the Bureau of Labor Statistics unemployment rates.
Low Property Taxes
Investors need to keep their expenses to the least amount possible. Finding areas with low property taxes will contribute to this endeavor. Cities that are thriving and financially sound can have lower property taxes because their expenses are covered by other revenue. However, the location still needs to fit into the other categories.
Low Insurance Premiums
Looking for areas to invest that naturally have lower insurance premiums can also save on expenses. Locations that are less susceptible to natural disasters would be a good start.
Real Estate Value Per Location
Consider that real estate in certain areas of cities holds its value better than in other areas. Similarly an investment in one area may increase faster and more significantly than another. If you examine property in the center of the city and expand outward, values will change. Good advice is to stay within the center of the city or look for the area that is growing the most such as the urban sprawl. An excellent resource is to search the S&P National Home Price Index for your area.
Affordable Homes
Look for areas where the average home price is no more than triple the average income. This will ensure your property will be likely to appreciate and sell quicker in the future. It will also affect how much you can sell for if you fix and flip.
Know Your State
Some states are more friendly than others toward landlords. Eviction times, repair laws, rent collection, and even unannounced visits are just some of the things that favor landlords in certain states. Investigate what your state’s laws are concerning rental properties.
Considering these items will help ensure you are buying healthy real estate. Are you looking to finance a real estate investment? Contact us for more information on how we can serve you today.