There is certain criteria to look for in an ideal real estate investment property. If you look at small to medium sized single-family homes, use this checklist:
- The house should be in good condition. It is okay to refresh the paintwork and the landscaping but you do not want to spend money on expensive refurbishments to a rundown house.
- The wise choice of house is not the most expensive on the street. The least expensive would be preferable because you will realize increased value if the nearby properties are expensive.
- Check the selling history of the neighborhood. Have prices gone up or down over the last ten years? You want to see a steady increase.
- Your investment property will be attractive to many tenants if it is near schools, parks, a shopping centre and public transport. A stable and safe neighborhood is a priority.
- Check the average rental of homes in the area to help determine the possible monthly return on your investment.
What are the advantages of a buy-to-let property?
- Someone else’s money is helping to fund your investment property.
- When the loan is paid off, the property and the growth value is yours.
- The cost of funding the property (interest paid) can be used as a tax deduction.
- Besides the maintenance, it is a relatively unencumbered investment with excellent growth over time.