It’s no secret that real estate investing is one of the best investment strategies for wealth creation. Whether you’re interested in income generation, appreciation, or leverage, real estate investing will only be successful if you find the right property. So how do you do it? Check out our 5 tips on how you can find an investment property.
How to Find an Investment Property: #1 Know Where to Look
When you’re trying to find an investment property, you have to know where to look. Try an area or a neighborhood where one (or more) of the following exist: universities, schools, hospitals, shopping, and transportation. If let’s say you find an investment property in a college town, or a neighborhood with excellent schools, you have some sort of guarantee that your tenants will be long term tenants. Moreover, you’ll be assured that demand for your investment property will always be high.
You should know that investing in areas with the factors mentioned above does not automatically mean your tenants will be great. BUT, areas with these amenities usually have high demand, and positive returns. So make sure to do your research in advance and ask around the neighborhood/city. Getting into your car and driving around town looking for a “for sale” sign has never been a bad idea.
How to Find an Investment Property: #2 Check Out Online Databases
The internet has a huge array of websites and online services that make your search for an investment property easier than ever. Today, you can use websites such as Realtor.com, Trulia, Zillow, and Craigslist to find an investment property. These will give you a great amount of information on homes for sale, recent construction, and foreclosures. Plus, all of these websites offer you different search options that can filter your specific needs and requirements to help you find the best property for your investment.
How to Find an Investment Property: #3 Use Mashvisor
Speaking of real estate websites, Mashvisor is THE website to use if you’re trying to find an investment property through real estate analysis. Mashvisor allows you to view thousands of listings in different states, cities, and neighborhoods across the US and cuts a 3 month property search into 15 minutes.
If for example you’re considering Boston real estate, all you need to do is type the neighborhood (or city) name into our search engine and the rest is taken care of by the site. Mashvisor’s investment property calculator will show you values for CoC return, cap and occupancy rates, and estimated rental income. Not only that, Mashvisor also allows you to use property and neighborhood comps, and even tells you the optimal investment strategy (traditional vs. Airbnb) for each distinct neighborhood.
And there’s more! You can also use Mashvisor’s heatmap to get an overview of different key factors in the area. So if you’re interested in investing in a property with high Airbnb occupancy rate, you may highlight that factor and the map will show you where Airbnb is highest, and where it is lowest for a particular city.
For a full tour on Mashvisor’s features and tools, watch our demo video here.
How to Find an Investment Property: #4 Network
We’re always emphasizing the importance of networking in the real estate world. Your networks are essentially your most important asset. They include tenants, realtors, other investors, contractors, accountants, the list goes on. Make sure to build this network of yours and maintain it by staying in touch with your contacts, as it is key to successful investing. If you’re trying to find an investment property, you surely can ask one or more of these people in your network, and they can ask people in their network and recommend possible investment properties. Contacting owners and sellers directly is also great a great idea because they may know of a sale that hasn’t been listed yet. This way, you are of the first to know and make an offer.
How to Find an Investment Property: #5 Foreclosures
If a homeowner is no longer able to make their mortgage payments to the bank so the bank repossesses the property and attempts to resell it. This is how foreclosures work.
And while it’s never okay that someone has just lost a home, what’s great about foreclosed properties is the fact that they’re some of the best deals you’ll find. Banks are usually eager to transfer the property of the homes as soon as they can, and will thus give significant discounts, and accept first offers.
To find foreclosed properties, talk to local real estate agents and/or brokers in the area you’re searching. Real estate agents and brokers often work directly with banks and foreclosures so they ought to know one thing or the other about this type of investment. Some banks will have listing agents for foreclosed properties, so approach these agents and work with them.
These are just a few of many tips you can use to find an investment property. Try to find a property in a city where there’s strong demand forces, use the internet’s numerous sources, network, and consider alternative options in your search for a great investment property.
Do you have any extra tips? Share them below!