Residential real estate is the best form of investment. It helps you play the long game as an investor and gives you a regular income source. But if you want to ensure that you get the best ROI from your residential investment then there are a few factors that you need to consider before cutting that cheque.
Research
Become a natural sleuth when you want to buy a residential property. Don’t just go by popular opinion or other’s people’s tales of success. Learn about the location, visit it and understand things like accessibility, distance, neighborhood, and social infrastructure. Assess the builder before purchasing the property. Learn about his previous works, maintenance of the property, appreciation of the properties, and commitment to delivering on time. All these factors need your personal attention.
Average rent information
Conduct a survey on your own to estimate the approximate rent values in the location? Ensure that you match the average rental yield to your outflow on loan payments, maintenance, and other expenses that you might incur as a property owner. Check for items such as property taxes in the area also as they will also have to considered while calculating your total outflow. Vacancy rates are also a good indicator of the health of the rental market in the location. If you can access information on vacancy rates, then it will be a great indicator of how your rental yield will be affected.
Location
Buying a property because it is cheap is not the smartest thing to do. If you end up with a property in a bad location, you won’t get the rental yield you expect, and you also might end up with bad tenants. Also, you will struggle to fill vacancies and might find it difficult to find long term tenants. Ideally, a good location will make it easier to attract long-term rentals and will also give you a better ROI. The idea is to find a location that will also appreciate with time, thus finding a location that is ideal for a family and close to workspaces is the best way to ensure long term rentals.
Amenities
Today large communities are being developed with a host of amenities, making it convenient for families to navigate everyday life. Buying in such communities with a wide variety of amenities will make your property more attractive. Also, the additional perks of living in a well-maintained and equipped community, your rental value will be higher than the prevailing market value in the same location.
Infrastructure Development
Public infrastructure is another key to higher rental yields. If you are located in a place that has good roads, public transport options, and basic civic infrastructure in place then your chances of getting a higher rental yield are better. If the area has a lot of construction underway from the public works department then it is a great place to consider. Even if private developers are creating more projects in the area then it means that this location will be a key location for higher appreciation in the future. The key step to ensure you have good rental yield is buying a property that is reasonably priced and in a location that you yourself would consider to be a place to raise a family.
Investing in residential real estate helps in getting tax advantages also. Residential real estate is best for long term investment as many people are staying on a rental basis. Hence, investing in residential real estate can be an attractive investment with maximum returns.
