This article was written on behalf of John Mejia. John is a top producing REALTOR
Buying investment real estate at the moment requires some extra shrewdness. As the realty prices are fairly tempting right now, let's investigate the shrewdness angle!
In order to buy an investment property that is going to be a good investment we need to consider its rental chances and its re-sale chances. Where will there always be renters? What does this property have that will encourage re-sale? What does this property have that will still be there whenever you come to re-sell?
Some things such as a sea view or a mountain view can fall into this category, but there are also other investment indicators to consider. One of them is buying in a prospective baby boomers retirement area, such as parts of Arizona, Colorado, the Pacific North West and choice coastal areas. But another investment idea is to buy in a town that will always have renters to rent your property.
A town that always has renters is a town that has a transient population. One of the classic examples of this transience is a University town or city. Quite often parents of college students have bought a second home for their child to live in, and have accidentally found this to be a lucrative investment. The house can be virtually paid for by its renters. Of course, it is not the perfect investment - there is some work involved!
Ideally you will live near this University town, or you will have a child attending University that will take care of the renting for you. If neither of these fits your case, you may be advised to re-consider, unless you are retired and will have extra time to devote to the investment.
Most students do not like to live on campus, and are happy to pay for a room in a house where they share the common areas. Every August, thousands of students flood into a town looking for a place to settle into before school starts in September.
Most homes are three bedroomed and three rents will cover your mortgage. If you make the renters responsible for splitting their own electricity bill, they will all ensure to be more economical. If you pay the bill, the ones who like three hot baths a day will do so! If they pay the bill, they will remember to turn down the thermostat before they leave for the day.
You will be paying the house taxes and perhaps the Internet. (Having Internet already in place is an incentive to move in.) These days everyone has a cell phone so there will be no land line necessary.
The closer you can buy your property to the campus, the easier it is to rent. Waiting for buses/car rides etc is a nuisance to be avoided; being able to walk to the college is a big plus for the renting student. Also they are saving inconvenience and money, which means that you can keep your rent high.
In spite of the odd drops in the property market, most University towns stay steadier with their realty prices- this is obviously something that you can check. This will mean that not only are others buying your house for you, but you will reap the annual appreciation as well.
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