Every investor’s intention is to make good deals on their real estate property. So, either as a pro or newbie, the goal is the same.
A real estate ‘pro’ is expected to know what determines a real estate investment. So let’s consider this article as a guide to investing in rental property for beginners.
It is important to know how to determine a good rental property in order not to run a loss on your real estate investment.
The location of the property is one major factor to consider when searching for your first rental property. This is because the location of your property will determine if you will make a good profit from your purchase.
The property’s location dictates the type of property available and how much value such property is worth. For instance, the type and value of a property in Lekki will differ from the one in Agege. This is because of the potential values of the properties which are significantly affected by location. The perception of one being in on the Island and the other on the Mainland automatically affects the price because of its surrounding. The location of a property also decides the amount you charge for tenancy. You don’t want to have your property empty because you overcharged compared to your competitor.
The location of a property is very important in terms of security because if a property is situated in a place with a high crime rate, the possibilities of people patronizing you for rent will be low. No one wants to rent a house in an area where they can’t sleep or wouldn’t be able to walk freely for fear of being shot by stray bullets. It is therefore important to carefully observe an area security wise before making a purchase. Also, when buying a property, you should look for damages like broken windows or door which might be hints of burglary on the property.
While the location of a property can mar the value you get, it can also be the reason you are smiling to the bank. For instance, having a property for rent in a student residential area means you will get fairly regular vacancies which equally translates to income. Same as how a property close to businesses will offer more value. The location’s property can also help you decide whether to invest in the area or not because if a particular area has a lot of vacancies, it is either it is a flag off as people are leaving the area or it is a sign to invest.
PICK THE RIGHT STRUCTURES
Finding a good property location is great, but also getting the right structure you desire is another thing. As a real estate investor, you already have in mind who your tenants should be. The next thing is finding the right structure for them. If the to be tenants are students, it is only reasonable that the apartments are single rooms or two that students can afford. Another example is having the structure that is suited for your tenants. A family sized structure should be spacious enough for everyone. While you are also deciding the structures of your property, you should consider the kind of properties close by. Is there a school close by or a church or a mosque? These things, even though might seem little, go along in determining your investment growth. Having your structure close to a church or mosque in Nigeria is an automatic invitation to noise pollution.
Aside from a property’s location and structure, there are other important factors that determine whether or not it is a good rental property. A property might be situated in a very good location and also be cheap as a result of damages or repairs that need to be. You need to be very careful in making a purchase for such properties because there are likely going to be more repairs to be made in future. It is not possible you notice all the damages while inspecting and the seller might also keep some away from your knowledge. So, you don’t want to end up making repairs with all your rental income. Therefore, it is important that the house you intend to buy is in good shape.
ACCESS TO SOCIAL AMENITIES
Another factor you wouldn’t want to leave out on how to determine a good rental is whether or not there are needed social amenities in the area. A good property should have access to good water and you would want to check out for good road network to avoid issues of accessibility which could discourage intending tenants. There should be good roads connecting the area to other places. You also need to know if there are schools, hospitals among other things.
Owning a property is a big deal and is a long-term investment. Rule number one or the most important rule remains “Be patient and thorough”. Your safest bet is to contact or real estate agent to guide your steps.