12/02/2013

Tips for Wise Property Investment

So you would like to buy investment property in 2014?  So if you are picturing future income, future security, or retirement plans, then these are things you might like to think about in order to make wise choices:

1.  Looking for a opportunity market.  This is where the current demand is low, but likely to get stronger in the future when the value of your investment will go up.  By taking a look at certain types of neighborhoods that were not identified as "desirable" but have now grown into more stable residential zones, you may be making a good risk.  One of the challenges many first-time property investors need to keep in mind is to take themselves out of the picture--this may not be an area you would personally live in, but one that is "home" to others who might become your renters and provide the income you're looking for.

2. Considering different types of property.  You may need to look at a range of properties, and assuming you're considering residential investments, you will need to know the difference, for your purposes, between investing in a duplex vs. a 10-unit apartment building. 

3.  Look for the best yield you can get.  What sort of revenue will you obtain from your rents, and what will your overall return on investment be?  This will vary by the property, the area and type of neighborhood.  One thing some owners forget to consider is that changes in the equity in their property, which changes with the market, may actually be affecting their return on their investment. 

4.  Keeping up with the market.  Political and economic affairs do impact local market values.  Local city/county improvements, or new attractions to the area, may bring (or lose) buyers and sellers, causing an increase in prices.  It pays to keep up with the trends.

5. Be as diverse as possible.  Buying several different types properties may protect you more against market forces beyond your control.  This may mean buying in different cities, regions or even countries. For instance, Riverside County took a very steep drop in values, more so than many areas along the coast.  Those areas, however, have also been recognized as "opportunity" when the prices started to shift upward.

For an analysis of your investment property, at no obligation, just contact me!  Learn about current market rents, current cap rates, and other important facts to consider.

If you would like to try your own property analysis, download the form here:  http://www.juliahuntsman.com/Long-Beach-investment-income-property.html

Julia Huntsman
562-896-2609

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