Becoming a real estate investor is a great way to start building wealth, but selecting your first investment property can be confusing without some help.
When you're ready to start buying property, you will need to consider a few things to ensure you get great results. Things like rental demand, budget, and property prices should all affect your decision, but where do you start?
PMI Bay State will help you ensure you succeed in real estate, no matter what your investing experience is like.
Keep reading to learn how to choose the perfect investment property in Boston!
Set a Budget
Before you start investing in real estate, one of the first things you must do is set a budget. Doing so will help you determine how much you can spend, and it will make narrowing down your choices in Boston easier.
To set a budget for an investment property, consider how much money you already have and how much you will be receiving soon. Keep in mind that after buying a property, you must continue to invest in it, so your budget should be much higher than the cost of the property.
Choose an Area
After setting a budget, the next thing to do is choose a neighborhood in Boston that attracts you.
Depending on the type of property you want, some areas may be better than others. For example, if you want to invest in a commercial property, you can find a plethora of great properties near the downtown area.
However, more residential properties can be found in the suburbs and at much more affordable rates.
Research Property Prices
Speaking of rates, it's best to research local property prices to better understand what you can expect to spend.
Property rates fluctuate often, but some of the main things that affect a property's value are location, size, and age. If you want to buy a large, new property in the Boston housing market, you can expect to spend more.
In a tough rental market, it may also be harder to find a decent property at an affordable price.
Another thing that will help you choose an investment property is calculating your ROI (return on investment).
The simplest way to calculate this is to subtract a property's operating costs from its estimated annual income. Doing this will allow you to determine how much you can profit from a property each year.
Operating costs can vary depending on many things, like optional things you invest in and maintenance. While all properties require maintenance, you may also want to hire a rental management service to help you. Something like this should also be considered when figuring out how much you can profit.
Look for an Investment Property Today
After reading this guide, you now know the basics of selecting a great investment property.
Here at PMI Bay State, we encourage you to hire a property manager to help you get the most out of the Boston housing market. Even if you want to invest in commercial properties, a property manager can provide you with the assistance necessary to maximize profits from them.
Do you want more information about our property management services? Contact us to get all of the answers you need.