Everybody wants to make money in real estate. But it is becoming more and more difficult to turn a profit. During the housing bubble, it seemed like any property could be purchased and then flipped for a profit. Times have certainly changed though. Now, investors need to follow a series of steps in order to determine whether or not to purchase a house or a lot. Here are a few things to look for when trying to decide of a property is profitable or not.
Do Your Research
In order to find your real estate cash cow you’re going to need to research the property first. The most successful people in real estate are not those who are flashy and throw around the big bucks. No, the successful real estate investors are lab rats. When I say lab rats it means they study properties to the finest detail. Those who spend the time to fully research a property before purchasing it are the ones who’ll earn the most amount of profit out of them.
For a commercial property, one thing to research is the traffic. With real estate they always say the three most important things are location, location and location. This couldn’t be any truer for commercial properties. Check to see how many people on foot and by car pass by the property. For a business location, the inside or outside doesn’t really matter much. It’s all about the location. It needs to have consistently high traffic and be easily accessible.
When it comes to buying a residential property as an investment, you need to do your research as well. The single most important thing to study is the average income of the residents of the neighborhood. For example, let’s say you’re purchasing an apartment complex. In order to keep most of your tenants, you’ll need to be able to keep the same rent as the previous owner. But the previous owner is selling the property because they can’t make a profit on it any longer. Therefore, you’ll need to see if there’s a way you can squeeze more money out of the property to make it work.