Top 5 Things to Look For in an Investment Property
Once you’ve decided that real estate investment is your next move, you’ll need to start looking for a good investment property. Make no mistake, as soon as you start telling people you’re looking, there’ll be no shortage of people trying to sell you a property. The trouble is, they probably have no idea what makes a good investment property. They just know it’s a property and that hopefully they’ll make some money hooking you up with the seller. Keep your wallet locked away until you know the top five things to look for in an investment property.
Cash flow is the money that’s left over after you’ve paid for everything related to your investment. It’s hard to believe there’d be anything left over after paying for things like the mortgage, insurance and the property manager fees. It’s especially hard given the high cost of properties across the U.S. right now. Yet tens of thousands of real estate investors see positive cash flow every month from their investment properties. You can too, using the same strategies they use, by investing in cash flowing turnkey rental properties out of state. I would recommend looking for at least $200/month in cash flow for single family homes, and $150/mo/door for multifamily properties.
Even cash flowing turnkey investment properties have to be affordable to you. If you aren’t able to come up with the down payment and closing costs, you won’t be able to make it work no matter how sound an investment it is. It’s possible to buy a turnkey rental investment property for less then $20,000 down and $3,000 in closing costs. If you can manage that, then you can find an affordable investment property at MartelTurnkey.
Whether you buy a turnkey rental from MartelTurnkey or an investment property from someone else, you need to make sure you’re dealing with an upstanding and trustworthy seller. Turnkey rentals from MartelTurnkey are completely transparent. You’ll be able to know exactly what renovations were done to the property. The turnkey rentals at MartelTurnkey sell for their appraised value – never more. Make sure that wherever you buy your investment property from, you get at least this standard of transparency. If you can’t trust the seller, you can’t trust that you’re getting what you think you’re paying for.
Ability to Choose Your Own Property Manager
If you’re looking at a possible investment property that’s cash flowing, odds are that it’s out of state from where you live. You’ll need a property manager to handle the day to day. The turnkey rentals MartelTurnkey sells already come with a property manager in place. However, you’re under no obligation to retain that same property manager. You can use whoever you want, or not use a property manager at all. Be aware that this isn’t the case with all turnkey property sellers. Some of them will put you under contract to use their property manager for a certain number of years after closing, even though it’s your property! The shocking thing is the seller then likely gets a kickback from the property manager. You don’t want to work with a seller like that. You want to always be able to hire and fire any property manager of your choosing.
Obviously if you’re buying an investment property you’re going to want tenants to be attracted to the property enough to rent it out. So even though you won’t be living in the property, you do want it to have attractive features that will entice good tenants. Features to look for in a good investment property include:
– close proximity to employment opportunities
– fenced-in yard
– attractive rehab
– nearby parks/playgrounds
– local cafes, restaurants, etc.
A sound investment property doesn’t need to have every single one of these features, but it should at least have the job opportunities, an attractive rehab and one or two of the others on the list.
These are only the top five things to look for in an investment property; there are more things that you need to consider before finalizing your decision. We’d be happy to talk to you about what you should be looking for in your next real estate investment property purchase. Please contact us any time.