Planning to invest in property? If so, buying an investment property at St. George is one of the best decision that you can make for it also adds income to you and your family. There are lots of investors that used such calculation methods in determining which investment will be perfect for them. You have to put in mind that before you make any investments, especially significant investments, you have to take consideration of some rules for buying an investment property!
Location! Location! Location!
This is very important when buying investment real estate. It is also said to be a huge factor in doing so. Why? Location is the primary and the first thing every investor watches out for. As an investor, you can always change anything in a home, but you cannot change where is it located. If you prefer a quiet neighborhood, you have to look for it. Look for a place where the people would want to be. You can always ask for their opinions and preferences. There are some great and perfect houses, but they are in a bad area. This won’t get you the profits you are looking for. To find the ideal place, you must take consideration of the things you need to see in a location.
• Convenience. A lot of people would prefer investing in a place where facilities like groceries, laundry area, etc., are convenient. They want to make their life easier by making the things they do more convenient and save time where they can.
• Low crime. Who wants to live in an area where there are lots of crimes happening. Do you think you can handle such like thefts, vandalism and dealing with bad tenants or neighbors while your children should be playing around your yard? Of course, no one would like that.
• No main roads. Relaxation and comfortable is what everyone wants. Why live in a place where you’ll hear loud car noises, traffic in front of your home, and such pollution if you can invest in a more quiet and peaceful place.
• No commercial property nearby. These things can make you feel uncomfortable due to their loud noise, litter, vandalism, and traffic as well.
• Proximity to schools. Some families prefer having a nearby school for their children; it would be less of a hassle traveling and commuting for them. They can simply walk and save money, as well. But, others would prefer not so near and not so far. Since if they are near a school, there is a possibility that children will be loitering around their neighborhood that might cause traffic and litters as well.
• Things to do. How can you tell that your home stands in a good neighborhood? Well, precisely, if you can see parks, shops and can be restaurants too. If the place is quiet and free from crimes as well.
Know Your Numbers
There are few equations on how investors determine if a property is a good investment or not. One method would be the use of “Cap Rate.” In here, the Cap Rate would be your net income divided by the asset cost. For example, you bought a house for $150,000. You rent it out for $1000 and incur about $200 a month. Your net will be about $800 a month or $9600 per year. You would then divide &9600 (which is your net income) by $150,000 (the amount of the house you bought), you would have a result of 0.064 or 6.4% return on your investment. Remember that you should always set your goals before investing in a house. If you don’t reach your goal, then consider looking for a different house!
Another method will be the 1% rule that some investors use. This rule indicates that the house you are about to rent out should bring in 1% of your purchase price in each month. This type can be changed from market to market as some would say. This can also be an excellent guideline for investors to use, especially when determining the house’s value as an investment.
For some investors, they would prefer the use of the 50/50 rule to let them stay on track. This type of rule indicates that 50% of the profits will go to other expenses than to the mortgage. This would include repairs, taxes, and rental costs.
Don’t Get In Over Your Head
There are specific ways to consider to take in owning a successful investment property. Not because you saw it on TV, Ads in a newspaper, or by involving in flipping homes because you thought it looks fun. You must consider inspecting such property for any damages there may be. If you are not very well familiar with rehabbing a home, make sure that you don’t get to purchase a home that would need a lot of repairs. Not only will it cost, but it would be very stressful in many ways. There is nothing worse than having your house repaired minute after minute. Best way to do is to talk and to team up with people who are pros in investing and a team who are like-minded as you. They will help and guide you throughout your investing thrive.
So, are you interested in buying an investment property in St. George? If yes, we can help you find what you are looking and waiting for! Just Send A Message, or you can give us a call today! 866-409-0670. Your dream is in our hands!