Investing in either commercial or residential property can be one of the best methods of making a passive income. Property investors can enjoy the freedom of being their own boss, along with the ability to make as much money as they like by investing in more houses or other buildings. However, before you go ahead and purchase your first investment property, there are many important factors that must be taken into consideration.
#1. Location:
Before you invest in an apartment, house, commercial property or another type of building, it’s important that you consider its location. Just as if you were going to be purchasing a property for yourself to live in, when investing in residential property, the location is a hugely important factor that can often determine the likelihood of finding great tenants. You wouldn’t want to live in a property with a poor location, so keep this in mind when making your investment. Ideally, a residential property should be in a nice area and close to local amenities such as shops, schools, hospitals, and transport links. If you are considering investing in commercial property, the location is just as important – will it be difficult for shoppers to get there? For more information and tips, visit Triple Net Property.
#2. Price:
Secondly, before you make a property investment, it’s vital that you take the price into consideration. Many property investors will need to borrow money, most commonly in the form of a mortgage, in order to purchase the property before making a return on their investment. So, you should bear in mind the monthly repayments that you will be required to make for any funds that you borrow, before offsetting this against the average rental price that you can expect for the property. It’s important to determine this before you decide to be sure that you can make a profit from your investment.
#3. Work Required:
It can often be cheaper to invest in a property that requires some renovation work; in addition, a newly renovated property is also likely to gain more interest from potential tenants than an older one. And, when you’re renting out a property that’s been recently updated, you can often expect to get a better monthly rental price. However, it’s vital that you have a clear idea regarding the amount of work required before you invest your money in a property. Before you make the purchase, determine both the time that you expect your project to take, and the amount you expect it to cost.
#4. Target Audience:
Lastly, you should have a clear target audience in mind when looking for an investment property. Whether you are planning to rent your property to an individual or groups of professionals, families, students, or businesses will determine the kind of property that you need to find and the type of area that it must be in. For example, if you plan to target students then you should look for properties in college towns.
Would you like to add to this list? We’d love to hear from you in the comments.
