For many people, investing in property is a great path to financial independence. But it can be a path wrought with pitfalls and headaches if your investment isn’t in line with your goals. Whether you’re looking to purchase your first income property or add to an existing portfolio, the following advice will help set you up for success.
Like shopping for a new pair of jeans, one of the most important things to consider is whether or not the property is the right fit for you. Even though you won’t be living there, it needs to align with your personality, interests, and capabilities, as well as the level of involvement you want to have.
Take a student house for example. While it’s generally easier to find tenants for these properties and rents can be set a bit higher, they usually require greater involvement on your behalf. Expect an increased amount of maintenance work and even the odd late-night call from a tenant who lost their keys.
On the other hand, purchasing a family house in a quiet suburban neighbourhood or in the country will likely require less involvement, but securing tenants may be more difficult.
The second major thing to consider is location and neighbourhood amenities. If you’re renting to students, is the university or college nearby? Is your property within walking distance or on a bus route? Are there coffee shops, pubs, gyms, laundromats and other student-friendly amenities close by? All of these features will increase the value of your property in the eyes of students.
If you’re hoping to attract families to your property, you’ll want to make sure good schools, parks, playgrounds and grocery stores are all within the vicinity.
And no matter if you’re renting to students or families, in high end or modest neighbourhoods, it always helps to have the nicest property on the block.
The last big thing to consider before purchasing is whether or not the property has been cared for and well maintained. If major renovations or repair jobs are required that you cannot do yourself, make sure to get estimates from reputable contractors before making an offer on the property.
Owning income property can be an exciting way to secure financial independence, as long as your investments align with your goals. For help finding income properties that complement your interests, capabilities and preferred level of involvement, speak to a realtor with extensive knowledge and experience in this space.