It can be quite intimidating to venture off into unfamiliar areas when you want to buy an investment property. You”ll be leaving your comfort zone, and leaving a market that you’ve come to understand. And why might you look in another area anyway? Perhaps your neighborhood is the not the best for real estate investment Or you’d like to expand your outreach in the real estate business. Or perhaps you’re simply looking to invest in an area that can potentially be more profitable than yours. They’re all valid scenarios that most real estate investors face at some point in their careers. But have no fear. There are tips you can follow on how to buy an investment property in an unfamiliar area. Ultimately, you need to do lots and lots of homework! Here’s your study guide:
Start by Choosing an Area
Choosing an area when you want to buy an investment property outside of your comfort zone can seem the most daunting task ever! But it’ll be an easier job when you know what to look for.
You’ll need to look for an economically developed city. You don’t want to invest in a city where the population is declining or the unemployment rate is high, for instance. Then, narrow down your choices by checking out the city’s Comprehensive Annual Financial Report. This report is equivalent to a businesses’s financial report, showing the state’s full economic development of each year.
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By looking at an area’s Comprehensive Annual Financial Report, you’ll get an idea of the city’s economic status and potential growth. Is employment high enough? Are people’s ages fair enough? Is the population growing? By answering these questions, you’ll be to narrow down your choices for buying an investment property.
You can also get to know an unfamiliar area by using Mashvisor’s analytical data. Using the heatmap, filters, and viewing the investment performance summary can help you to quickly analyze the investment opportunities in any area.
Make Sure the Market Meets Your Goals
Before you buy an investment property, you should check in with your goals. What type of real estate investment are you interested in? Flipping houses? Buy and hold? Airbnb? This is important to assess because sometimes an area that is great for real estate investing doesn’t have a big supply of foreclosures, for example, for flipping. So deciding on a real estate investing strategy is truly important before finalizing on the area you want to invest in.
Examine the Local Real Estate Market
Once you’ve decided on an area, delve deep into its real estate market before you buy an investment property. Know the demographic and psychographics of its population. What are their ages? Will they most likely be large families or couple or singles? Make sure to also find out the properties’ average prices, average rental income for traditional and Airbnb.
Network, Network, Network
After you’ve decided on a location and done your homework on its local real estate market, it’s time to build a team of experts. When you buy an investment property in an unfamiliar area, you’re most likely not going to be around much. So, you’ll need to network with the local community and hire experts that will manage the property.
For instance, you will most probably need to hire a property manager. Make sure that this person knows the local market like the back of their hand! You’ll want your property manager to know the local laws you should be aware of. They can also help you in choosing your real estate investment property, for they should know which properties to opt for and which to avoid. When you buy an investment property, they can even help you find renters.
How Can Mashvisor Help?
If this is your study guide, Mashvisor is your cheat sheet. You’ll still need to do your homework as suggested. But, Mashvisor will make this job ten times (if not more) faster.
Mashvisor uses predictive analytics data to help real estate investors properly assess the housing market, pricing trends, demographics, market fundamentals, and expected investment outcomes in any neighborhood throughout the United States. So when you ant to buy an investment property in an unfamiliar area, Mashvisor can reveal to you the the data you need to assess the area you’re considering for your investment. You simply search the area you’re thinking of and an analysis of the real estate market will simply show up to reveal all that you need. You can even advance your search by plugging in your budget and how you plan to pay.
Related Article: Investment Property Calculator For Analyzing Real Estate Investments
This will not only help you narrow down the area where you can buy an investment property, but it will also help you to decide its better off to stay as a traditional real estate investment property or if it is worth being listed on Airbnb.
Mashvisor will surely help you cut months off your homework and research. So, start finding the perfect investment property now! And have no fear if it’s in an unfamiliar area.