Looking for an Investment Property? 5 Things to Consider
Whether you are an experienced investor or just starting out, knowing what to look for in an investment property is critical to maximizing your return. When to buy and how to find investment properties are also very important aspects to real estate investments. The U.S. housing market struggled to find balance over the past few years, hampered by too few homes being chased by too many buyers. This drives up home prices, particularly in hotter areas, where bidding wars and gentrification are taking place. Whether you plan to have a rental property for residential tenants, vacant land, vacation rentals or commercial businesses, it’s important to consider these tips before buying an investment property.
1. Buying at the right price is critical
Understand what the real estate market is going to do and study the real estate trends in your area. Be patient, negotiate and don’t be afraid to walk away from a property. Don’t get emotionally attached to an investment property for sale. If you are unsure, we suggest contacting a well qualified real estate agent like Donn Bree or Meriah Druliner!
2. Find a good property manager
A property management company is usually run by a licensed real estate agent. A good one will understand how to manage tenants and get the best possible value from your rental property. They should conduct reference checks and make sure renters can pay on time. Be prepared to enforce and evict tenants.
3. Consider turnkey properties for sale
Kicking off a large scale renovation isn’t for everybody. If you need a steady stream of income, buying a turnkey property occupied with reliable, long-term tenants is a great way to get started. These turkey properties are typically a little more expensive up front but can save you money on contractors, permits and refinancing.
4. Arrange financing before making offers
It’s important to be prepared before you start making offers on properties. This includes lining up financing with a local community bank for a short-term loan or a conventional mortgage for more long-term rental investments. Once you’ve made a few rental property purchases, you can start borrowing money privately from friends, family and investors.
5. Don’t expect your property to always appreciate.
Even in California, the real estate market experiences fluctuations. If you’re planning on flipping, remember that while home values can fall, rental fees are more resilient. This enables your to forecast cash flow, calculate returns on an investment property and plan on investing in more properties for sale.
Investment Property in the San Diego Backcountry
In the backcountry, many real estate trends precede changes that take place in metropolitan areas. Our expert backcountry real estate agents have noticed the market softening as potential buyers are opting to hold their down payments and wait for prices to come down. We believe that these developments make San Diego backcountry investment properties a good buy for those interested in turnkey rentals, vacation rentals (Airbnb, VRBO, Homeaway) or wholesale properties for buy and sale. Donn Bree, Red Hawk Realty Brokerage owner, adds that investing in a rental property for sale in the backcountry is a smart buy because they are currently very popular among tourists.
“Clients are looking for a rural get-a-way experience coupled with the activities available (dining, music, golf, hiking, boating, fishing, horseback riding, gliding, hang gliding, rock climbing, etc.) in a rural community.” – Donn Bree, Owner/Broker Red Hawk Realty
Top 5 Things to Look for in a Potential Investment Property
Whether your potential real estate investment is in the San Diego backcountry or not, these aspects are very important to consider before you purchase any investment property. You may be tempted to buy a fixer-upper, i.e. homes that needs significant repairs and upgrading, in hot locations. These can be costly as expenses are hard to predict and will require valuable down-time that could be used to recoup your investment.
Turnkey properties, particularly turnkey rental properties are a great way to get a long-term property investment portfolio started with little risk.
Here are the top 5 things to look for when shopping for an investment property:
- Income potential
- Versatility of property use
- Condition of improvements
- Desirability of property to others
- Appreciation history of property
- Up-front repair costs
Interested in buying a vacation rental as an investment property? Watch our YouTube video on Airbnb opportunities in the backcountry.
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Our Backcountry Investment Properties and Homes
We hope you found this useful. Browse our investment properties for sale and other great Red Hawk Realty San Diego backcountry properties here. We know investment properties for sale, let us help you with buying an investment property. Come visit us in Santa Ysabel or Julian to tour our favorite investment properties.