Buying an investment property is one of the most significant financial decisions you’ll ever make. So much so that it wouldn’t even be an exaggeration to say that getting this right can completely change your financial situation for the better for the foreseeable future. This is especially true in Florida as the state of the housing market is constantly shifting.
Considering how important it is, it’s vital that you are able to accurately assess a property that you’re thinking of investing in. This is easier said than done as figuring out what properties will have the best returns can be rather complicated. To help you out with this, we’ve prepared a list of the four most important factors that you need to consider when buying an investment property.
Location
Location is one of the most important factors to consider when choosing an investment property. Remember that location pretty much dictates the value of the property above everything else. Think about it this way, it’s better to purchase an average-looking home in a good location than a luxurious house in a bad location. At the end of the day, you can always renovate the property to increase its value as long as it’s located in a premium location. For the most part, you’ll want to avoid purchasing a home in a less competitive market as it essentially means that you’ll be taking on more risks.
Down Payment
For the most part, you’ll want to buy an investment property that has low down payment property requirements. Take note that the down payments attached to investment properties are vastly different from the down payments of buying a standard home. Unlike regular real estate purchases, investment properties usually require you to put down at least 15% to 20% down payment. In order to get the best deals for an investment property, you will need to work on getting a better credit score and improving your debt-to-income ratio.
Return on Investment
It’s vital that you take the potential return on investment into consideration when buying property. One thing that you should always keep in mind when it comes to getting a return on your investment is the 1% Rule. This rule entails that you should only invest in real estate if it will allow you to earn 1% of the total price you paid for it every month.
Property Management
Money isn’t the only thing that you’ll need to invest when purchasing property. Managing property will require you to put in a significant amount of your time to ensure that the property is maintained and is kept in optimal condition so that it doesn’t deteriorate in value. Now, you don’t have to do this yourself as you can always hire property management services. With that being said, you will have to take these expenses into consideration before purchasing the property. If you’re looking for property management in Ocoee, FL, you’d be hardpressed to find a better option than Orland REO Professionals. Our team of experts will make sure that your property is in optimal condition to maximize the value of your property.
Conclusion
While it may be a little intimidating, purchasing investment property will be more manageable as long as you know what to watch out for. We hope this article proves to be useful in helping you purchase the best properties to invest in. Be sure to keep the factors we mentioned in mind when purchasing property so you can make the most informed decision possible.
For more help with property management in Ocoee, FL, and other areas in Central Florida, you can count on Orlando REO Professionals. Our wealth management team has the staff and the systems in place to care for your property the way you would expect and as if it were our own. Call us today to know more!