What You Need to Know About Buying Investment Properties

shutterstock_172122455Foreclosures and short sales in Phoenix mean there is an abundance of properties available for less than market value. These are ideal properties for real estate investment, as they generally offer the biggest potential for return.

It is important to note that fast property flips like those shown on TV are actually very rare. Most of the real estate investment market right now is geared toward rental properties, as that provides more stable monthly income. That being said, consider whether you would like to actively manage your property as a landlord or outsource the job to another person. Managing your own property requires a significantly larger time commitment. It is also recommended that you live close to the property in question to handle late-night calls or last-minute emergencies.

Real estate is a great way to diversify an investment portfolio. As Mark Twain said, “Buy land; they’re not making it anymore.” The real estate market might wane, but real estate is ultimately a sound investment over time – especially if purchased intelligently in a prime location.

Investopedia’s Andrew Beattie recommends looking at the following things when evaluating a potential investment property:

  • Neighborhood
  • Property taxes
  • Schools
  • Crime rates
  • Job market
  • Amenities
    • Parks
    • Malls
    • Gyms
    • Theaters
    • Public transport
  • Building permits in the area
  • Number of listings already existing in location
  • Average rent in area
  • Natural disasters

Always consider employment opportunities when selecting an investment property. If employment exists, people will come to the area and they will need a place to live. Ideally, it would be wise to purchase a home in a growing neighborhood where a large mall, store or company has just built a new location.

Conversely, it is easy to spot a neighborhood that is past its prime, as it will have a large number of listings not associated with any particular seasonal cycle (as with university areas).

Always be prepared for periods of vacancy in which you have no tenants and have a back-up plan in place if tenants do not pay rent. There are no guarantees in real estate investment, so plan in advance.

We pay cash to buy homes in Phoenix so real estate investors like you can get a bargain on your dreams of property ownership. If you are looking to buy a home in Phoenix, All Homes AZ can make the process a whole lot easier. Call today and talk to a real estate professional who can help.

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