When it comes to really doing the math for a property investment, it’s going to depend on the individual circumstances of a home. However, if you’re looking for investment potential, you don’t want to spend your time picking through the fine details of every single market on the home. By learning to spot the factors of an equation that can easily turn to profit, you can add up to real estate riches much quicker.
Homes with more available space tend to always be in higher demand. This means that buying property with greater square feet amounts is going to give you a likely sell in most markets. However, it also means that you can make some improvements to the space in existing properties to not only bump up their value but attract more buyers. In particular, there are some additional rooms like a laundry room or a home office that can add extra value. Both extending a property and maximizing existing space by knocking out walls and going for more open-plan designs can be a money-smart move.
Always, always pay attention to the area when you’re buying an investment property. That should already be a given for most people interested in real estate. But what is it that makes a location a particularly good buy? For one, there are some natural beauty features that always sell. Waterfront real estate has always been a relatively safe bet. But there are other aspects like the safety of an area, including relatively low crime rates, a lower average age of neighborhood occupant, and proximity to features like schools, retail centers, and so on, that make an area an attractive prospect.
Some areas are going to be designated as “luxury” areas, and regardless of the market, these properties always tend to keep their appeal. Why is that? Simply put, the kind of people who can afford luxury properties tend to be above the movements of the market in the ways that regular buyers aren’t. The area isn’t all that defines a luxury property, however. If you want to get into that market, you have to be able to identify works by renowned architects, association membership, or access to amenities like local country clubs.
There are two types of change to take advantage of. If you can get one, fixer-uppers can prove dramatically profitable if you’re able to renovate and repair in a cost-effective manner. But perhaps the most favorable changes are the ones you have to wait for. If you spot a neighborhood or a town/city on the rise, then buying while the buying is cheap can be one of the smartest moves you can make. Usually, this change can be spotted by looking at where new businesses and retail centers are building, or where there are already significant new homes being built.
The points above can help you spot real potential. However, do remember that you have to sit down and do the individual math, comparing properties to similar ones in the area, considering the costs you’ll incur, and so on. Show your working if you really want the best outcomes.