Looking to diversify your investments and take advantage of some great real estate prices? The new year is just around the corner, and it’s the perfect time to add some new rental properties to your real estate portfolio.
Of course, just like any investment, real estate requires careful planning and consideration if you want to make the most out of your money with buy-to-let. While real estate is well-known for its durability as an investment solution, the key is planning your purchase. An error during the buying stage is something that’s sure to come back to haunt you for the life of your property ownership. On the other hand, if you can snag a bargain, then you could set yourself up for lifelong success.
Here are a few great ways to boost your real estate buying strategy in 2019.
1. Buy at the Perfect Price
While “buy your property at the right price” might seem like an obvious suggestion, getting a bargain early on will help you to withstand fluctuations in real estate value that can occur over time. The better your price is at the beginning of your investment, the more likely you are to get a good return on investment if you decide to sell your rental property later.
To make sure you’re getting the perfect price, you’ll need to find out what “value” means in your chosen neighborhood. Take some time to find out the average price of similar homes in your area and remember to research future developments too. If your community will be building attractive amenities in the coming months, it may be worth paying a little more now. You’ll also need to benchmark rental prices for similar units in the area. You can use the local classifieds for your research here, just make sure to factor in any extras (i.e., utilities) if you’re going to include them in the rent.
Related: How to Perform a Real Estate Market Analysis
2. Find the Ultimate Neighborhood
“Location” is always an important issue when buying real estate, but it becomes particularly important when you’re buying as a buy-to-let investor. You’ll need to find a community where your rental property will be accepted by the locals. Some of the most expensive areas in town might not be the best fit, but you’ll also want to avoid low-quality parts of city where crime rates are higher.
As you’re searching, make sure to check out the regulations and rules for your chosen neighborhood. Some locales treat rental properties more like companies than residences. Make sure that you find out everything you need to know about the demands of rental committees in your local area before you make a purchase. If you don’t, you could encounter some expensive surprises.
3. Find Proper Parking
Parking is critical when you’re purchasing a rental property, for many reasons. First of all, it’s safe to say that you’ll have an easier time finding people to live in your rental houses if they have somewhere to park their car when they get home from work. Additionally, it helps to know that the local Chicago moving company your residents use will be able to park outside when they’re delivering property to the house.
However, the biggest reason why parking is crucial is that certain towns require parking from any residential home. In some neighborhoods, off-street parking is critical for all tenants in a building old enough to hold a driver’s license (even if they don’t drive). Other jurisdictions require one parking space per property. Once again, this is something you’ll need to research.
Various municipalities are starting to pass new regulations around parking, which is something you’ll need to pay close attention to in 2019.
4. Stick with Simple Construction
Highly modern properties with endless angles or historical homes with beautiful leaded glass windows might seem appealing at first glance, but you’ll have a harder time maintaining them as a landlord. Ultimately, while it’s easy to get carried away by extra features and stunning aesthetics, the more complex your rental property is, the more problems it will cause you.
For instance, a slate roof is a wonderful thing from a visual perspective, but it’s also very expensive to repair. As building contractors will often tell you, the shape of your structure will help you to determine its complexity. Four-corner buildings are the easiest for any landlord to maintain.
In the buy-to-let strategy, look for a house that’s simple and solid. The property you choose should be made with standard materials, which ensures that repairs will be easy enough to manage when they eventually come around.
5. Bigger Isn’t Always Better
Another point to keep in mind as we enter a new year is that bigger won’t always be better for your rental property strategy. Sometimes, larger more luxurious homes are much easier to rent out, if you find real estate in the right neighborhood. However, in certain parts of Chicago, and indeed around the world, there’s a growing movement towards smaller properties. Some designers have even begun to build micro homes and apartments.
While we don’t recommend necessarily going “miniature” with your house investments, keep in mind that the bigger your property is, the more you’ll need to pay in terms of taxes. Room size also doesn’t always have as much of an impact on rental income as you might think.
The best option? Research what your target market is looking for in your area, then make your decision on the best square footage from there.
6. Do Your Own Research
Finally, a great realtor is always an essential part of a real estate investment strategy. Real estate agents will help you to find crucial information about the neighborhood you’re buying in, and the type of property that’s best for your needs. However, it’s important to do plenty of your own research too.
Read books on real estate investment. Stay up-to-date with the latest blog posts and articles from people in your industry. The more you learn about the ever-changing investment world, the better off you’ll be. As we head into 2019 and new regulations, rules, and trends hit the marketplace; the best investors will be the ones who are always one step ahead of the curve. Knowledge is power, don’t forget it!
To find lucrative investment properties for buy-to-let in Chicago and other Illinois locations, sign up for Mashvisor.
This article has been contributed by our friends at Bellhops.