5 Things to Consider before Buying an Investment Property
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Spring is the start of the buying season, it coincides with us starting fresh in a new house, environment, starting a family, and probably a new career.
Real estate is one of the businesses that can be compared to a roller coaster ride. One day the market is up and the next day it's down, figuratively speaking. However, this goes to all business there is. Food, clothing, accessories, crafts, etc. there is always a rise and fall in demand.
Real estate may be one of the most unpredictable industry in the market, but investing in real estate is the best and safest option there is for anyone who would like to put their hard earned money into.
I have found this article online about 5 Things Every Real Estate Pro Knows from www.investopedia.com on things you should know before buying an investment property.
5 Things Every Real Estate Pro Knows
By Glenn Curtis | source: www.investopedia.com
Study Local Pricing
The first things to study are the current price trends in the area. For example, a potential investor should look to see if the price of homes is accelerating faster in one area than in others. Next, check to see if the average home price is more than in other neighboring towns. This will provide an idea of where the biggest demand is. Another reason to study these trends is that, over time, you will start to develop a sense for which prices are "fair" for certain properties and which are overpriced. For individuals looking to buy properties at the lowest cost possible, this knowledge can be invaluable.
Look for a Catalyst
One sign that an area is up-and-coming and that it will be desirable in the future is the development of new infrastructure. When you see new roads and schools being built, it's a sign that the community is set for a growth spurt. Investing in a growing community can be very profitable. In addition, certain types of development, like new shopping centers, may be extremely attractive to homebuyers, and may also help keep the tax base low.
Explore Low-Tax Alternatives
If there are two towns side by side - one with high property taxes (or with progressively rising property taxes) and the other with low property taxes - the one with the lower taxes will usually be more in demand.
Check the School Rankings
Nearly every state ranks its schools by how well students in each district fare on tests in math and English. Sharp-eyed investors should look for schools that are moving up or are atop the list. These areas are often desirable to parents. Access to quality education is a big selling point to new home buyers.
Watch the Outskirts
If the properties in a major city or town have become overpriced, the areas on the outer fringes most likely will soon be in demand. Areas in close proximity to major bus and rail transportation are even more desirable Nearly any area that is about to install a major train stop or a new major bus route will see its proverbial stock go up in value.
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