1. Open Canvas: Your safest investment bets are properties which can be developed “up”…such as land that can be sub-divided, or properties that can be given an instant upgrade with lower-budget cosmetic renovations. .
2. City Zones: Get on the phone to town and city planners to find out the restrictions that exist for properties you’re considering purchasing. Is the use you’re after not approved? Check back when the city reviews zoning regulations for the area.
3. Renovation Time: While the right renovations can dramatically increase a property’s value, others will cost you far more than you’ll get back on a sale. Know the difference: Research to find out what the real value of your improvements will be.
4. Tick Tock: Know how long you’re willing to wait to see a return on your investment. Long-term and short-term property investing strategies are very different. Talk to your financial advisor to see what is the best fit for your budget.
5. Playing Safe: Always look at what a property is going to cost you — beyond just the sale price. Taxes and other expenses can be a big drain on finances. Make sure to take them into account before you purchase.
6. Real Value: Consider how much of the value of your prospective buy is in the land, rather than the building. Buildings can lose value as they age, but land tends to increase. The more of your money is in the ground, the better your chances.
7. Moving in: Be sure to consider your future tenants when choosing a property. What sort of renters will your investment attract? Properties capable of attracting quality tenants will mean less work as you wait for your value to grow.
8. Key Consideration: It’s not just the property that matters — it’s also the setting. Is the neighborhood up-and-coming, or on its way down? Is it attracting municipal funding or investment? The right location makes all the difference.
