Make Sure the Real Estate is Good for your Investment Needs
In order to judge if the property is a good investment, one must consider and know their needs. Real estate is always a good investment but that doesn’t mean that a certain property fits the investment goals of everyone.
To begin with, one must ask themselves the following questions:
- What am I going to do with the property?
- Is the property for investment only?
- Is the property Buildable?
- Do I plan on building on the property in the short term?
- Do I want to build on the property sometime in the future?
- How close is the property to the nearest interstate or main road?
- How close is the property to area schools?
- What is the Population growth rate?
- Are there jobs in the area?
- Where are the nearest airports located?
- How many can I afford to spend on this property?
- Do I believe this investment will do better than putting it in the stock market or letting the money sit in a savings account?
Based on your individual answers to the previous questions, you will gain an accurate idea about what particular property is right for you.
The main question to ask is if the property is buildable. Obviously being buildable is good for the buyer, but buildable property always goes for more of a premium. Purchasing a property that is not buildable or with no road access is usually cheaper and may give you a better return on your money in the long run. A common myth is that property that is landlocked and not buildable will never be worth anything. Usually parcels without road access are in underdeveloped areas of counties. As infrastructure grows, previous rural areas outside of the main town will become developed. More roads will be constructed and population will increase. Not to mention, these parcels make it easier for people to get started in real estate because most of the time, they are substantially cheaper than other parcels.
With that being expressed, the proximity to a main road is essential in determining how long to hold your investment. If you plan on investing in the short term, this proximity means more than to the long term investor. Development will spread out from main roads. The closer the property is to a main road, will usually mean access and infrastructure will hit that area and property first. Rural property is still a good investment for a longer term oriented investor.
The proximity to the nearest major airport gives a good idea of economic development and potential of the area. If people are easily able to travel to any certain location, they will travel there more. Business is now a national and global market and people need to travel for business and pleasure as well. Companies are going to build their business around airports because it gives that easy access to the global market. Companies obviously create jobs which in turn causes population growth and development.
Population growth has proven to be a significant indication on the potential value of any given property. If people are living in the area, the economic effect will certainly be reflected in current and future pricing of properties in the area. You can obtain population figures from the US census bureau online. Related, job growth and quality of life are also important factors. Take a look at the surrounding area to see if there are parks, theatres, or shopping malls. Be sure to look at the local cuisine, restaurants are a great way to get a grasp on the area culture. Also remember that large chain stores and franchises often open in areas with proven or potential economic growth. These sorts of retail establishments require a significant investment for the company. These establishments are places strategically where people are located and would buy their products.
Another important aspect to consider is the overall area as a whole. Be sure to understand what the market will bear where the property actually is. Do your own research and look at pricing and sales of similar properties in the area. There are often ways online to search for local MLS listings depending on where the property is located. |