Real estate investing is not as easy as it sounds. Successful investors know it requires careful planning in multiple steps to ensure an ascending revenue. Nevertheless, as overwhelming as this process may sound, you can learn how to spot a highly profitable property in a snap. How? Experience is the best tutor in the world, and has taught them some traits all proritable rental properties have in common.
Setting the Boundaries
Before starting your research, you need to have clear in your mind how you will manage your property. If you wish to be actively involved in your investment’s management, you should check areas relatively close to where you live. On the other hand, if you plan on hiring a property management company, location should not limit your options.
The next step involves finding properties that fill the bill. To do that, you must be able to recognize features characterising properties with potential. Here we go:
The surrounding district is a crucial factor affecting the type of future tenants and the frequency of vacancies. If, for example, you choose to buy in a countryside area close to the beach, the most probable scenario is seasonal renting to tourists in the summertime.
When it comes to property taxes, many investors think the lower the taxes, the better for their pocket. However, this is not always the case. If the quality of living is low, your property is less possible to attract long-term tenants, ending up vacant more frequently with the costs running. So, apart from checking all tax information, talk to the neighbours and find out how pleasant living in this area is and how popular it is for families.
Speaking of families, long-term tenants with good paying habits search for houses near schools with excellent reputation for their children. Hence, it is also important to check the quality of the schools near a property. Believe it or not, bad schools can affect the value of your investment downwards!
This is a no brainer. High crime rates reduce the value of your property. The police and the public library are places where you can find reliable crime statistics about the area you are interested in. Look for vandalism rates, petty and grave crimes as well as a comparison with previous years to understand how the problem is evolving. Did you know that Cyprus is actually considered as one of the safest countries in the world?
Growing job opportunities mean more people are moving in the area -in other words- more tenants. Have a look at recent figures from the National Statistical Service and keep your ears open for news that can be translated into great job openings shortly.
Public transportation lines, parks, malls, and gyms are crowd magnets; thus, it is important to have amenities like these close to your property. Check city guides and local free press to have an idea of what an area can offer.
You might have found a nice area, yet this does not mean that it will remain so 5 or 7 years from now. For example, if there is a big construction activity, the view from your house might be restricted. On the other hand, an area that isn’t considered one of the best at the moment might climb to the top due to a major change, for instance, relocation of an airport. Get informed by the municipal planning department about upcoming developments.
Properties with potential are in areas with low vacancy rates. High demand equals to high rents.
You might afford to own a property in a wealthy area, but what can be said in few years from now? If an imminent rise in taxes can lead you to bankruptcy, it might be wiser to make another investment.
Another factor you must take into account is natural disasters. For example, if an area is prone to flooding, insurance might cost you a lot more and lessen your rental income.
Now that you have read all these tips, do you feel ready to enter into the adventurous world of investments? Explore our site and check some truly incredible opportunities on the beautiful island of Cyprus! Contact us for further information.