Investing in a real estate property that will generate income every month is not as simple as some people may wish to think. There might be a lot of opportunities for you to invest in real estate but unfortunately, not all of them will yield the same results. That is to say, if we take a look at some of the successful investment properties, we will see some common traits that they all share. So if you are thinking of investing in or purchasing a property for steady cash flow, you have to take those common traits into consideration. Otherwise, your investment may ultimately lead you to incur losses. That being said, here are the common features of a profitable investment property.
Before you begin
It is always important to think about your options thoroughly. You can either choose to invest in a commercial property or a residential property. Although theoretically, they are different, they both share the same characteristics. However, there are some fundamental differences between them that you should consider before opting for the purchase. For example, it won’t be ideal to rent out a space for commercial activity that is built for residential use. It will not have the required facility to successfully run any business. Although technically you can turn your residential apartment into a commercial space, that will not be ideal as this can have direct or indirect negative impacts on the neighborhood.
That is why, first decide what type of property you want to invest your money in, then proceed to do the next phase. In other words, consider the important features of a profitable investment property (regardless of it being a residential or commercial property).
The success of your investment depends a lot on the neighborhood your property is located in. So before investing in a property, choose the right neighborhood because it will determine the types of tenants you are gonna get. If you are investing in a residential property choose the neighborhood that has every facility and amenity to sustain a healthy lifestyle. That includes a great community, shops and bazaars, parks, gymnasiums, religious institutions, and so on. For commercial space, on the other hand, you should look for the basic facilities that are needed to run a business smoothly, which includes infrastructures, security, and connectivity. That is why being located in the right neighborhood is one of the most important features of a profitable investment property.
Talking about the important features of an investment property, having proper transportation facilities and smooth connectivity with the rest of the city is essential for any location to become a suitable place for investment. In most cases, if an area doesn’t have proper infrastructures for communication and transportation, it will fail to attract people’s attention. Which in turn makes the area underdeveloped and less suitable for investments. This is exactly why having a proper infrastructure for accessibility is crucial for any investment property.
Educational institutions, healthcare facilities, banks, and financial institutions are some of the most important establishments for any residential area to become successful. If an area or neighborhood doesn’t house any educational institution or medical facilities, it will less likely to attract families who want to settle in the area. Similarly, depending on the business type, you want to be in close proximity to other establishments. For example, restaurants and cafes are usually located in an area with a steady stream of people all day. In other words, it is either located in a popular residential area or in a commercial area with plenty of organizations. Therefore, being located in close proximity to important establishments is amongst the most essential features of a profitable investment property.
If you are investing in a property, it is always important to look for a place with opportunities for future developments. If there is a lot of construction going on, it is probably a good growth area and has the potential to attract investors. This also triggers further developments including road improvements, security improvements, and so on. Visit the respective government websites, offices, or newspapers for more information on future or current developments and plans in an area. Not only will this help you choose the right investment property, it is also one of the most crucial features of a profitable investment property.
As we mentioned before, these are the most common features of a profitable investment property. However, although these factors have major impacts regarding an investment property’s success, these alone may not contribute to the outcome that you are hoping for. That is because the real estate sector, in spite of being sturdier than other sectors, can behave unpredictably sometimes. Also, you may consider looking into other factors (e.g. vacancy rate, average rent, etc.) that can have a substantial impact on an investment property’s success. An unusually large number of listings and vacancies in any neighborhood, for instance, can indicate a seasonal cycle or a neighborhood in decline.
That is why it always best to resort to professionals for such important decisions. Here at Bproperty, we have an excellent team of professionals who can guide you and walk you through every step of the decision-making process, and ultimately help you buy the perfect investment property.
Do let us know if you have any questions regarding an investment property’s success. Leave us a comment in the comments section below.