Buying Investment PropertyWhat Are the Features of the Best Investment Property? by Victoria Daibes November 26, 2017February 7, 2019 by Victoria Daibes November 26, 2017February 7, 2019To find the best investment property in real estate is your ticket to making lots of money and guaranteeing positive cash flow returns as well as financial security in the long term. The best rental income properties share similar characteristics, and it is up to the real estate investor to identify the best places for investment properties to reap a good return on investment in terms of high cash on cash return and high cap rate. The best rule of thumb to avoid, or better yet mitigate, high vacancy risk and high tenant turnover is to choose safe neighborhoods in prime locations and booming economies. Whether you choose a traditional rental strategy or an Airbnb rental strategy, location is a key determinant of the success or failure of your investment property. Related: What’s the best real estate investment for beginner investors?9 Features of the Best Investment Property1. Location is a key prerequisite for the best investment propertyNo surprise here! Choose to invest in real estate in thriving economies, good areas, and safe neighborhoods. The best investment property is located in areas with low crime rates and good nearby amenities (i.e., schools and parks). To elaborate further, look at the bigger picture in terms of the city you want to invest in, make sure you invest in places with thriving economies, high employment rate, and high economic growth.2. Positive economic indicatorsBecoming a real estate investor takes lots of research and planning. Do not invest in random places without conducting proper real estate market analysis. Real estate investing is your business, so make sure you analyze and study the housing market you want to invest in. Know how to conduct comparative market analysis to grow your rental income potential and maximize your return on investment. The economy plays a huge part in the upturn or downturn of the housing market. If the economy is in a downturn, property prices plummet, and real estate investors might incur major losses. To mitigate this risk, choose rental income properties in healthy housing markets looking sunny side up. To find the best investment property, real estate investors look to the bigger economic picture before honing down on the investment property itself.3. Attractive property with enhanced home appealIf you want to attract the right tenants, you must ensure your investment property is in a great shape. Tenants stay away from rental properties requiring major repairs and renovations. As a landlord, do not delay major or minor repairs because delaying can hurt your wallet down the line and eat into your profits. Also, make sure to enhance the appeal of the home, i.e., adding a pool in the backyard or growing a nice garden around the house can make your rental property stand out in a good way.4. High rental income and low vacancy riskThe best investment property with good ROI gives landlords the leverage to charge high rent and find good quality tenants in a relatively shorter period of time. Moreover, rental properties in good areas reap high occupancy rate, high cap rate, high cash on cash return, and low vacancy risk. Mashvisor’s investment property calculator gives real estate investors an estimation of the overall return on investment by factoring in their expenses and cost. Mashvisor also cuts your time in half because it allows real estate investors to find the best investment properties by a click of a button.5. Positive cash flow returnsA positive cash flow property is the best investment property. Basically, you want to buy a rental property reaping a net profit that is greater than the sum of your expenses. It is crucial real estate investors conduct comparative market analysis, including a cash flow analysis to identify the best investment property for growing their real estate business.Related: Cash Flow Investment Property: The Key to a Successful Investment6. Low property taxesThe best investment property is in a location with low property tax. Paying too much taxes on your rental property can be a huge hindrance to your earning potential. Make sure you are fully aware of the tax laws in the city you want to invest in.7. High cash on cash return and cap rateThe best investment property reaps high ROI. To be more specific, you want to look for the cash on cash return and cap rate before you decide to buy your first rental property. The higher the return on investment, the better. Make sure your numbers are in the positive.8. AppreciationThe best investment properties accumulate appreciation over time and essentially increase the rental property’s worth in the long run, given a healthy economy. The buy and hold real estate strategy is a sound investment for many real estate investors because they collect short-term rewards in the form of rental income and gain long-term appreciation when they do decide to sell it.Related: Become an expert on real estate investing: What is a good ROI for rental property?Best Places to Invest in the Best Investment Property This Year If you are looking to buy your first rental property this year, we give you the best places for the best investment property right now.1. Sacramento, CaliforniaMedian Property Price: $449,000Traditional Rental Income: $1,370Airbnb Rental Income: $2,210Traditional CoC Return: 1.3%Airbnb CoC Return: 4.2%Traditional Cap Rate: 4.3%Airbnb Cap Rate: 7.3%Airbnb Occupancy Rate: 62.1%2. Charlotte, North CaliforniaMedian Property Price: $441,000Traditional Rental Income: $1,640Airbnb Rental Income: $2,300Traditional CoC Return: 2.4%Airbnb CoC Return: 5.1%Traditional Cap Rate: 5.1%Airbnb Cap Rate: 7.9%Airbnb Occupancy Rate: 52.6%3. Raleigh, North CaliforniaMedian Property Price: $492,000Traditional Rental Income: $1,560Airbnb Rental Income: $2,290Traditional CoC Return: 1.6%Airbnb CoC Return: 3.5%Traditional Cap Rate: 4.4%Airbnb Cap Rate: 6.4%Airbnb Occupancy Rate: 52.0%4. San Diego, CaliforniaMedian Property Price: $828,000Traditional Rental Income: $3,000Airbnb Rental Income: $2,980Traditional CoC Return: 2.3%Airbnb CoC Return: 2.5%Traditional Cap Rate: 4.8%Airbnb Cap Rate: 5.1%Airbnb Occupancy Rate: 66.6%5. Las Vegas, NevadaMedian Property Price: $225,000Traditional Rental Income: $1,210Airbnb Rental Income: $2,070Traditional CoC Return: 3.5%Airbnb CoC Return: 8.6%Traditional Cap Rate: 7.4%Airbnb Cap Rate: 12.8%Airbnb Occupancy Rate: 28.5%ConclusionInvest your time to acquire the right real estate education to make smart investment decisions. Successful real estate investors study the housing market to find the best places for investment first and foremost. Become a real estate expert and see your returns double in no time. Mashvisor will help you in all these. That’s how you will learn to buy the best investment property each and every time.Happy Investing! Start Your Investment Property Search! START FREE TRIAL Start Your Investment Property Search! START FREE TRIAL AppreciationCash FlowLocationProperty TaxRental IncomeVacancies 0FacebookTwitterGoogle +PinterestLinkedin Victoria DaibesVictoria is an experienced content writer who enjoys writing about all aspects of the real estate market and industry. Previous Post Miami Real Estate Market: Top Neighborhoods – Q4 2017 Next Post How to Be Successful in Real Estate Investing: Tips for Beginner Investors Related Posts How Do You Find Off Market Properties? How to Find Investment Properties and Start Making Money by 2019 16 Best Ways to Find Off Market Properties in 2021 Comparative Market Analysis: Make Sure You Are Not Losing Money When Buying an Investment Property Top 10 Cities for Owning Investment Properties – US Housing Market 2018 What’s Stopping You from Making Money in Real Estate Which Investment Properties for Sale Make for the Best Vacation Home Rentals? What Cash on Cash Return for a Rental Property Can You Expect in 2018? 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