If you invest in real estate, you know that purchasing properties for investment purposes can be a lucrative form of extra or primary income. But whether a real estate investment becomes prosperous or not depends on many factors.
In 2020, according to the National Association of REALTORS®, buyers in the U.S. purchased 5.64 million existing homes, and many of these were investment properties. To increase the likelihood of making a profitable real estate investment, look for the following qualities in the properties you purchase.
You may feel tempted to purchase a real estate property due to emotional ties. But since you will likely not be living in the property yourself, you should base your purchase solely on your finances and if the property will provide decent returns.
A good location
A good location is one of the main factors that affect the profitability of any real estate investment. Where you purchase a real estate investment impacts how much rent you can bring in, the vacancy rent you will experience and the quality of your renters.
Over time, your real estate investment should appreciate in value. When you look at potential properties to buy, look at how much appreciation you can gain by making cosmetic improvements to the property. You should also consider how much you could sell the property for later on.
It may take a little time and research to find a solid real estate investment. But doing your research beforehand can provide the potential for consistent returns on your initial investment for years to come.