If you are planning to purchase a new home for investment purposes, there are multiple things that you should consider. Here are a few of them:
Where a house is located can have a large impact on its cost per square foot. It can also impact future resale value. A house that is located in an up-and-coming neighborhood is likely to increase in value over time. However, homes in areas of town that are already dilapidated may actually decline in value.
If you are purchasing a home and would like to make a great return on your investment in the future, look for a house in a new, promising development or in a historical area of town that is receiving lots of new interest.
It is also important to note where the house lies in reference to desirable places that people frequent, such as local parks or downtown entertainment.
The Floor Plan
If you are not planning to completely change the internal layout of the home, look for a home that has a buyer-friendly floor plan. Nowadays, many people prefer an open-concept home that has few divisions between common living areas. This makes it easier for buyers to interact with those inside their home without the hindrance of a wall or other barrier.
Many new homes have open floor plans, but older homes are typically divided throughout the living area.
How Much Was the Home Worth Years Ago?
By reviewing the past increases or declines in a home's value, you can help project it's future worth. Homes that have steadily declined in value may not make a good investment property if you are planning to sell in a few years. Still, it is important to keep in mind area developments, such as the installation of a new neighborhood park, that could help drive home values higher.
How Much Are Homes in the Area Rented For?
If you are planning to rent out the property, it is important to know how much homes in the area are currently rented for. This can give you an idea of the amount of money that you may be able to clear each month by leasing the property to a tenant.
The State of the Property
Lengthy renovations can delay a return on your investment, so it may be best to only look at homes that are move-in ready or that have few needed updates and repairs.
To learn more about selecting a great investment property, schedule an appointment with a real estate agent in your area.