The 4 C’s of a Great Investment Property

Owning real estate can be a great investment, especially in a volatile marketplace.  However, it is important that you choose the right investment property.

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So, what makes a great investment property?

The old adage of “Location, Location, Location” is certainly true.  And you should define a great location for an investment property differently than you would a property you intend to live in.

But there are other things to consider as well.  Choosing the right investment property takes hard work and a fair amount of research.  So let’s take a quick look at the 4 C’s of a great investment property:

  1. Character
  2. Cost
  3. Condition
  4. Crime

Like the diamond assessment of Clarity, Cut, Color and Carat, the 4 C’s can help qualify and quantify your real estate investment in short order.

Character

Character is something to consider when looking for an investment property.  As an investment property, your opinion of the property’s charm should not carry much weight.  Instead, clearly articulate your target buyer.  Be able to describe their yearly income, hobbies, likes and dislikes.  Then, when viewing a property, try to imagine how much it might appeal to those specific target clients and prospective tenants.  You will also have more luck finding buyers for properties whose designs and décor are similar to other homes in the area.  A property that appeals to as many prospective tenants as possible often makes for a better investment.

Condition

The condition of the property also must be considered before buying an investment property.  As with any good investment, you want minimal costs eating into your profits.

Some investors want a fixer-upper, while others prefer turnkey properties that won’t require any elbow grease.  Find a property that’s in the type of condition you’re comfortable with.  If you decide to go with a fixer-upper, learn the cost of your potential projects before submitting an offer. “Those costs can get very out of hand, especially if you’re not living in the property,” says Matthew Bell, economist at Australian Property Monitors.

Cost

Real estate makes a great investment, but don’t go overboard when buying an investment property.  Before making an offer on a property, research rental amounts in the area as well as the cost of insurance in that particular neighborhood.  A great investment pays for itself, so make sure the rent you’re likely to collect is enough to cover your monthly costs, including the mortgage on the property, insurance and the costs associated with managing and maintaining the property.  Real estate investors often reap great rewards when selling their properties, but it’s still important for potential investors to consider other of factors before investing in a property.

Crime

Properties in safe neighborhoods that boast good schools and offer easy access to public transportation tend to make outstanding investments and will be much more valuable to you in the future. No one wants to live next door to criminal activity.  So, check the frequency of police presence in your neighborhood.  Go to the police, the public library or search online for accurate crime statistics.  Items to look for are vandalism rates, serious crimes, petty crimes and recent activity (growth or slow down).

Conclusion:

Finding an investment property that ticks all the boxes – good returns, tax-benefits, and potential for growth – requires some careful assessment and thorough analysis.  One way to balance your knowledge base against your time investment is to call upon local experts.

Regardless of your unique property needs, Ideal Property Group can assist you. Consider the Ideal Property Group as your comprehensive Raleigh, NC real estate resource. Here you can preview properties for sale, tour neighborhoods and, if you like, maybe even get to know us better.  It’s all about providing you the tools you need to confidently complete your real estate transaction.  Those tools include easy to use property search tools and local area info.  If you need our expert Raleigh, NC real estate assistance, we are a click or call away. No pressure, no strings – just great service!

 

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