Houselookups.Com Guides On Things To Look For In Real Estate Investments

You might have decided to go ahead with your plans to invest in real estate. But, have you considered what the most important thing to consider in such investments is? Of course, it is known fact that location is crucial, but there are multiple other factors that can help in determining whether you are making the right investment decision.

Location of the property

Location is still the most important thing when it comes to real estate investment and making profits. Being close to scenic views, green space, amenities, and the status factor of the neighborhood factor into the valuations of a residential property. In commercial properties, closeness to freeways, transport hubs, warehouses, markets, and tax-exempt zones play a crucial role.

Things to look for:

When considering the location of property, it is important to consider how much the area can evolve over the period of your investment. For instance, the peaceful land at the back of the residential building today can become a manufacturing facility within a few years, which will diminish the value of a residential property. Houselookups.com also advises you to review the ownership and the intended use of the immediate places to the location where you are planning to invest.

Valuation of the property

Property valuation is crucial for financing at the time of the purchase, taxation, insurance, investment analysis, and listing price, and the valuation of a property depends on all these factors.

Things to look for:

The common real estate valuation methods are:

·         Sales comparison approach: Look at the recent comparable property sales having similar characteristics: most suitable and common for both old and new properties

·         Cost approach: The costs of the construction and land, minus depreciation. This is for new constructions.

·         Income approach: It is based on expected cash inflow, which is for rentals.

Investment Purpose and Horizon

Houselookups.com says that given the high-value and low liquidity investments in real estate, the lack of clarity on your purpose might lead to financial distress, especially in situations where the investment is mortgaged.

Things to look for:

Identify the categories that suit your purpose and plan based on that:

Purchase and self-usage: You will save on rents and get the benefits of self-usage, while also ensuring value appreciation.

Buying and leasing: It ensures long term value appreciation and regular income. But, the temperament to become a landlord is required for handling legal issues and possible disputes, repair work, and manage tenants.

Short term buying and selling: It is usually for medium, small or quick profit. It is the property that is under construction and gets sold for a profit after it’s completed.

Long term buying and selling: It is usually focused on getting large intrinsic value appreciation over an extended period. It provides alternatives for complimenting long-term goals like retirement.

Real estate can be the way for you to earn the profits that you are aiming for, provided you take the right steps as per the ideas given above.