Real estate is an asset class that has made people rich for centuries. If you are an investor, you would be wise to have part of your portfolio in real estate. Looking for a good investment property can feel like looking for a needle in a haystack. There are many properties out there, but only a few are worth investing in. It hence begs the question, ‘what should a real estate investor look for in a good investment property?’
Many of the challenges you'll face with any rental property can be managed and mitigated with the help of Venice property management. Still, there are a few things you can look for when choosing a property that will allow you to avoid future problems altogether. The following are some things that investors should look for in a good investment property.
Return on Investment Potential
Ultimately, investment is about obtaining a financial reward. One of the most critical financial metrics to judge an investment is its Return on Investment (ROI). When looking at investment properties, you should always consider how much money it will make you.
When evaluating a potential rental property, the monthly rent amount should cover ongoing costs while also putting profit in your pocket. If you're not sure how to get the research to analyze Venice rental properties or what to look for, a property manager has the data and experience you need to run the numbers.
What Tenants Want
As a real estate owner and landlord, it may be difficult to take an objective view of a property. It will be even harder for you to put yourself in the shoes of your tenants. What renters in Venice want in a property is more critical to your bottom line than considering what you might want in your private residence.
If you are thinking of buying a piece of real estate, think like a tenant! What amenities do local renters want? What features help keep rental properties competitive? While you might want top-of-the-line countertops and expensive flooring, most renters won't want to pay a high price for those amenities.
Tenants want to feel safe and comfortable in a rental home and pay a competitive monthly rent amount. Choose a property that offers these features that helps renters feel at home, or invest in a property that can deliver what they need with cost-effective (and smart) upgrades!
Location and Nearby Amenities
Real estate is not a stand-alone investment like a manufacturing business. The surroundings of the property contribute significantly to the value of the investment. When evaluating a new rental property, think about the location.
Does the property have:
- Nearby restaurants and shopping?
- Proximity to highways and entertainment?
- Excellent local schools?
- Parks and recreation services?
Renters enjoy walkable neighborhoods and plenty of access to anything that enhances their lifestyle. Putting yourself in the shoes of a renter can help you evaluate a potential property's location before buying a property that won't attract quality renters. Even the best rental house on the street will stay empty (and lose money for you) if it's not in a desirable location for tenants.
New Construction vs. Existing Property
Another crucial factor to consider will be whether the real estate investment will involve constructing a brand new building or purchasing an existing one. Each will have its own set of pros and cons, which will influence your decision.
- New properties will typically offer better prices, modification ability, and access to modern amenities. The cons include increased cost of construction, delays in development, and other unknown factors.
- An existing property will offer convenience, easier access, established improvements, and existing demand. The risks will include higher maintenance costs, reduced attractiveness, and legal issues.
A real estate portfolio with a mix of established and newly constructed homes can help meet the needs of more renters in the Venice area (and boost your income).
Ultimately, every property in your real estate investment must work to meet your long-term financial goals. One bad property can slow your progress or cause income from other rentals to cover the costs of a poorly performing rental.
When evaluating ROI, tenant needs, and a property's location, make sure everything points to more progress toward your long-term wealth. Work with a Venice property management company to talk through your goals and evaluate new investment opportunities. The right property manager will help you find the best properties to add to your investment strategy. They'll also steer you away from properties that aren't the right fit or won't help you make more money.
A property manager also helps ensure rental properties comply with all laws, codes, and regulations for housing tenants and generating income.
Work With Venice Property Management to Find the Best Investments
Always take the time to do your due diligence when evaluating real estate. A potential investment might look like an excellent new rental property, but running the numbers can tell you the real story before it's too late to back out of a purchase.
If you're not sure what to look for in an investment property, Gulf Coast Property Management is here to help!