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 Welcome to the MikeFreemanProperties.com Blog

2017-03-29 15:37:17
How to Locate a Home with Investment Potential

Are you looking for an investment property in the Round Rock area? Buying an investment property is completely different than buying a personal home. While it is a different process, I’m here to help! Here are several ways to spot a home with investment potential in the Round Rock area:

Who is Your Audience? – Determining your audience is important when deciding on a home to purchase, with the intent of renting it out. Are you looking for this investment property to house a family of four living in the suburbs? Or, 20-year-olds looking to live near the action? Be sure to consider who you are targeting before searching for homes.

Location, Location, Location – Where does your audience want to live? If you’re targeting individuals in their 20s, consider looking for a property in an area that has shops, restaurants, and grocery stores. These locations are extremely appealing to the younger generations!

Or, if you're targeting a family, be sure the home's location is in a quiet neighborhood in one of the area's top school districts. The school district is imperative to families with children – so, be sure to keep that in consideration. 

Lots of Bedrooms – If you’re targeting 20-year-olds, consider maximizing the number of bedrooms to optimize your money-making potential. Even if there are empty rooms, chances are you will still make a profit.

For families – be sure your rental property has enough bedrooms to support a family. A four-bedroom house should do the trick! 

Make Sure You Can Rent – Before you purchase the home, make certain zoning laws and the homeowner's association allow renting.

Math Always Wins – Before buying a property as a rental, do the math! According to Trulia, here are a couple of rules of thumb for purchasing a rental property:

  • The 1% rule: If the rent is 1% of the sale price, it is worth looking at!
  • The 50% rule: “You want a mortgage payment (not including taxes and insurance) to be less than 50% of the rent!

Consider the Expenses – Expenses for a property may vary, but here is a list of some of the average costs you will encounter:

  • Mortgage Payment
  • Property Taxes
  • Homeowners’ Insurance
  • Property Management
  • Homeowner’ Association Fee
  • Vacancy Rate
  • Repairs

There is a lot to consider when looking for a rental property, but I’m here to help! Give me a call regarding any questions you may have about investing in real estate in the greater Round Rock area. 

  

Resources:

https://www.trulia.com/blog/how-to-an-investment-property-for-sale-with-potential/

 

 
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