If you’re thinking of getting your investment toes wet and buy your first property, there can be many considerations. You want to know where the property cash flow. What sort of mortgage must I get? How much down payment should I have? And you will also ask, “What type of asset should I buy?”
That’s a fair question. You would like to be able to both afford the property by having the renter help make your mortgage payment for you but you want to have a property that is attractive to future tenants. Do you really think that it is the perfect property to buy?
Location plays a crucial role in deciding whether you’re buying the right asset or not. For example, by driving through a prospective area pay attention to the types of properties that line the streets. Are the properties mostly single family homes? Do you see an occasional duplex or fourplex in the location? Are there apartments and condos nearby?
Buying a property that you plan to keep will need a low vacancy rate. You always want to have a rent-paying tenant. To be able to have a tenant, you should get a property that other home seekers wish to rent, own, or live in. Always look for that which stands out and obviously has higher market price. Does your potential purchase “stick out” as compared to other property? Is your new property investment the only duplex in the location?
When choosing which property to invest in and invest in, evaluate what property type is in demand in that neighborhood. If most of the homes are single family homes then you know there’s a interest in single family homes. The same is said for a duplex or fourplex property. You can tell a demand for your potential rental if there are other renting in your community that match yours.
If your real estate is similar to other properties in the community, it will be easier to sell and easier for a buyer to obtain a mortgage. Lenders like properties to be similar in nature in any specific location. Always go for what’s selling.