A Realtor’s 5 Factors To Consider When Purchasing A House For Investment
Which Criteria Should I Use As Purchasing A Property For Investing?
Hi everyone, I am your realtor friend Nathan Jeon. Today, I am going to talk about factors I consider when buying investment properties in Maryland.
As I was talking with my friends about this topic, interestingly I found that they are considering the exactly same factors as me when making their decision.
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EASY tip for beginners: Buy a property desired by crowd
It feels lucky to have friends who share the same standard with me. Of course, we can’t say everyone considers the same factors for purchasing properties, but it’s always worth it to know what types of properties are preferred by others.
Therefore, I suggest you to invest your 3 minutes to read this post, to find out what others consider when they make decisions to purchase properties in Maryland.
Why other’s opinion matter?
If you are just looking for your ideal house to live for the rest of your life, then you don’t need any other’s opinion. Only your opinion matters in this case.
However, definitely you want to consider other’s opinion as well if you are inclined to invest your money to real estate for the future profit. This post will help you to prevent from potential loss, and to maximize your future profit.
Real estate trend is constantly changing and you want to stay updated which properties are getting more popular and which are losing charms.
Advantages of Buying Properties that are preferred by Many others
There are three reasons we want to have similar standards with other people.
First, properties that are preferred by many people may perform higher value appreciation by time than undesired properties.
Second, properties that are desired by crowd conserves their value easier than uniquely demanded properties.
Lastly, preferred properties by many others can be sold easier than undesired properties, when you want to sell your property.
For these reasons above, I usually assess properties with not only by my own criteria but also other people’s criteria as well. Then, let’s have a look what standard is commonly desired by people.
Remember, these strategies are to remove partial financial risks that we may face to when selling house. Although buying a property in a popular area or property does not guarantee you will have more money at the end of the day, but it’s the greatest strategy for beginners to embark their investment.
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Buy Your House With Investor’s Mind
I understand, you deserve a perfect house for your life style. But remember, what you want might not be a something many people desire. Selling or renting your house can become pretty difficult if you bought a property based on your unique standards.
For example, let’s say you want to shorten your commute hour by buying a new home. So you decided to buy a house built on the place where you can directly access to the highway. Although this house has satisfied your top priority but I bet not everyone will want a house located near the highway where hundreds and hundreds of cars and heavy trucks are passing day and night.
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Location is the key to conserve the value of your house, Also we can expect more!
On the other hand, let’s say you bought a house near the downtown instead. With the same budget, it is going to be smaller than the house near the highway. The great advantage of this house is that you can easily access to everywhere in the city. Disadvantage is, you need to deal with some of traffics daily basis. Later, whenever you need to sell or rent out the house, the house may have significantly higher value than the price you paid. Also, it can be way more easier to have your tenant or potential buyer.
It’s the power of buying a property desired by crowd
Dont get trapped by your own dreamed house.
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Top 5 Good Locations i Suggest
Want to know my secret? How I decided to buy my house wasn't based on the usual factors that many people consider which is one’s own satisfaction. This tip is especially useful if you're not familiar with valuing houses or appreciating unique features of structures. Use this criteria to narrow down your potential houses, or simply give extra points to properties that have one of these factors.
5. Convenience Store within Walking Distance
If you are planning house hunting, consider properties near convenience store first. Especially look for convenience stores that offer healthy options like fruits, salads, and nuts. This makes it even easier to grab nutritious snacks on the go, promoting a well-rounded lifestyle alongside convenience.
Warning! if the convenience store is with a gas station, you may want to perform a comprehensive analysis.
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4. Proximity to Small Businesses Enhances Value
In my opinion, houses located near areas with many small businesses tend to appreciate in value more easily. This is because their visibility and access to foot traffic are higher, which is tightly linked to the property's centrality.
Centrality refers to how closely a property is connected to the center of a community and its amenities. This becomes even more critical when considering potential population decline caused by external factors.
In many cases, neighborhoods with declining populations see properties further away from the center experience steeper value depreciation. So, how do you identify a neighborhood's center? Look around and see where small businesses are concentrated. Find local restaurants, grocery stores, barber shops, stores, pubs and bars, care, or any business you need to visit regularily.
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3. University is a source of endless tenants
If you are planning to rent out your place in the future, you want to include university near your area. University is a good source of tenants supply. Every new season, new people will need places to stay. Not only students but faculties and any employees in the university need places to live. In my opinion, condo or apartment is a good option considering demographics of the university members.
2. Homogeneous properties in an area
Valuating unique individual properties requires high level of understanding of real estate market and many experiences. If you are investing to real estate market as a beginner, you want to buy a house where you can easily compare the value of your property with others. It gives you a significant advantage when you are trying to read the market trend. Therefore, simply purchase a house where many similar houses with yours are found.
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1. Public Transit
I love this feature, having a public transit in walking distance. It’s always in my top priority. Public transit always rewards me.
Having decent public transportations near home is the greatest blessing. It directly improves connectivity of the property with other neighborhood, downtown, and many other major facilities in the city.
Basically public transit improves proximity to the core function of the city. Big commercial mall, train station, airport, university, grocery stores, and many other office zone as well. But before you buy a property near the station, remember reviewing the route of the metro whether it connects your property to core facilities in the city.
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Summary
Location is the most important factor when you invest to real estate. But people don’t know which location is good to buy. There are many standard depending on individual’s strategy, but I guarantee the factors we discussed the above are the most easiest approach.
If you want to find a perfect property for you, just call me and say hello. Everything will become easy with me.
