Finding investment properties that can generate a good return on investment is the key to the success of any real estate business. In fact, the ability to identify properties with a huge upside is what’s going to make or break your venture. In light of this, how to find investment properties that can generate a profit for real estate investors? This is exactly what this article will focus on. In this guide, we will go over the process of finding real estate investment properties and share with you some valuable tips that should make it easily doable.
Investing in Real Estate Properties: What Should You Look For?
Before delving into the process of finding investment properties, we must first expand on some of the characteristics that these homes should boast. While the qualities that you’re looking for might vary depending on the real estate investment strategy that you’re planning to implement, there are some essential features that should be present in any income property. Here is a brief overview of some of them.
1- A good location
Location is the most important factor when it comes to determining the potential of an investment property. A good location is characterized by a wide range of features. Here is a look at what constitutes a good location for real estate investing.
- A young and growing population
- Proximity to essential amenities
- Good infrastructure
- Low property taxes
- A strong economy
Such locations ensure consistent rental income and are more likely to be home to multiple positive cash flow properties.
Related:10 Best Places to Invest in Real Estate in 2020
2- Low maintenance requirements
A rental property can quickly turn into a money pit if the maintenance costs keep escalating. Ideally, you want to find investment property that is ready to rent out immediately. These properties are ready to accommodate tenants the moment you acquire them and are able to generate rental income without requiring any extra expenditure.
3- Flexibility
Like we mentioned above, some property features will vary depending on your preferred strategy. Having said that, finding investment properties that are versatile and easily adaptable to any approach can be highly beneficial. This is due to the fact that real estate market trends can shift at any moment. Consequently, owning a rental property that can yield good returns as both a short-term and a long-term rental will be invaluable.
4- A good price-to-rent ratio
Despite its immense importance, this metric is seldom talked about. Making sure that your income property has a good price-to-rent ratio will allow you to stay competitive and avoid a low occupancy rate. Generally speaking, you should aim for a ratio of around 5%.
Now that we have explored some of the main features of good investment properties, let’s take a look at 6 tips for finding investment properties.
Finding Investment Properties: 6 Expert Tips
The process of finding investment properties can be very simple if you stick to the basics. In fact, a combination of real estate investment tools and proper market research should be enough to land you your desired property. Here are some effective tips for finding investment properties.
1- Work closely with a real estate agent
Working with a real estate agent can yield good results when you are looking for investment property. Additionally, agents that specialize in a wide array of real estate deals are capable of connecting buyers and sellers in an effective manner. Novice real estate investors can especially benefit from an agent’s know-how and extensive network.
Related: How to Find an Investor Friendly Real Estate Agent
2- Check the MLS
MLS stands for multiple listings services. More specifically, this is a collection of all the properties that are on the market. The best way to find investment properties that are on the MLS is to use a real estate investor website like Mashvisor. Thanks to a plethora of advanced tools like the Property Finder, you will be able to search for and analyze investment homes in any location.
Start looking for and analyzing the best investment properties in your city and neighborhood of choice.
3- Outbound marketing
Finding investment properties for sale does not automatically mean you should be the one finding the seller. In fact, you can let potential sellers find you. This is where outbound marketing comes in. This strategy revolves around letting your intentions known in the real estate sector and reaching sellers through an aggressive marketing campaign. Some effective outbound marketing techniques include direct mass mail and paid advertising.
4- Check off-market properties
Off-market properties are listings that are not available on the MLS. There are several reasons why some sellers choose not to list their properties publicly, discretion being the main one. More importantly for buyers, these properties can be undervalued and offer earning potential that is not available elsewhere. To access hundreds of off-market listings, head over to the Mashvisor Property Marketplace.
Related: 10 Easy Ways to Find Off-Market Homes for Investment
5- Use your network
Even if you are a beginner investor, your network might be able to help you find real estate property for sale. You would be surprised at the number of real estate professionals that you can reach through your various connections. Contractors, lawyers, private money lenders, and any other vital member of your network can provide potential leads to finding investment properties.
6- Work with a wholesaler
Working with real estate wholesalers can be a convenient way to find investment properties in your area. These professionals look for off-market properties, negotiate a low purchase price, and transfer the contract over to an investor at a higher rate. However, the only downside of working with wholesalers is the fact that they typically require full cash payment upfront. Needless to say, obtaining financing for such deals can be quite difficult.
The Bottom Line
Finding investment properties will be simple once you have implemented some of the pro tips outlined above. In fact, you might be able to land your ideal investment in a matter of days if you stick to a coherent strategy.
To learn more about how we will help you make faster and smarter real estate investment decisions, click here.