Most people tell us that investing in property is the right step to take when you’re financially ready for it. With the real estate market growing steadily, it is perhaps not that strange – but is it always the right decision, though? Buying investment properties can be a particularly lucrative opportunity if you don’t plan on living there yourself and it’s therefore supposed to be mostly profit.
Investment Properties: The Pros and the Cons
Here is a quick list of the pros and the cons to getting an investment property, plus a few tips on tricks on how to make the right purchase if you decide on investing in one.
Pro: It is a stable investment
Over time, a property has shown to be quite a stable investment as long as you’ve chosen an up and coming neighborhood. The better the area, the higher your chances are for finding the best one – so keep an eye out for signs that point in the opposite direction.
A high level of crime, for example, have properties in the area that need maintenance. Look for graffiti and broken bottles on every corner, these are things to keep an eye out for when shopping for a property. You’d want to it be close to schools, surrounded by well-kept properties, and in a neighborhood that’s quiet at night.
You know, all the things you’d be looking for if you were to live there yourself.
Con: There can be hidden problems
To follow up on the heading above, you never know exactly what you bought until you’ve lived there yourself for a while. Some problems can be tough to spot on just a quick visit, and you might end up paying more than you had in mind when you discover that there are pests in the property, for example, or a problem with the plumbing.
Some real estate companies are better than others, though, so make sure you’re dealing with one that takes a long and hard look at every property they manage. The company Roofstock properties makes it a bit easier as you can shop for a property online, and they pre-vet everything before marketing it.
Paying for a thorough inspection of the property can help you to have a list of things that are wrong with the property up front and could save you a lot of money down the road, should you decline a bad one.
Pro: Generate a positive cash flow
The reason we’d like to invest in a property if it’s not for living in is, of course, because it can give you a steady income when you rent it out. This should be enough to cover your expenses for the property, and maybe you’re eventually able to buy another investment property to make it go even faster around.
With enough time and enough investment properties, you could even make this your full-time job in the long run.
The trick is to buy a place in the right area, use the best kind of real estate agents to weed out any issues with the property, and make sure that you have responsible tenants to look after your place.