When searching for the perfect investment property, there are many things you’ll need to consider. From location to expected cash flow, there are several factors that will shape the success of your investment. This useful guide explains the top five factors affecting your investment property value.
Location
Historically, location proves to be the number one factor in determining a property’s success in the rental marketplace. Certain cities, such as London, Liverpool and Bristol, have been popular places to rent in recent years. Renters also choose to seek homes near:
● Good schools
● Public transportation
● Green spaces
● Grocery and retail options
Desirable neighbourhoods - places with convenient amenities and a strong sense of safety and community - will also increase property value by a substantial amount.
Expected cash flow
Positive cash flow is a top priority for prospective investors. The money coming in from your tenants will need to be enough to cover monthly expenses, such as mortgage payments, repairs and insurance. An ROI is a good indicator of this - a calculation of around or above 10% typically signifies that you'll have enough cash flow to not only break even with your property but also generate a profit.
Property age and condition
When it comes to renting, many people seek out newer, modernised properties in top condition so that they do not have to worry about frequent repairs. Therefore, a home’s age and condition are important factors that will contribute to its value and overall success on the market. Popular features include:
● New, modern architecture (unless the home has historic value)
● Modern plumbing, HVAC systems and roofing
● Modern appliances
● Curb appeal
Size and number of bathrooms/bedrooms
A spacious property will typically have a higher property value than a building with less living space in the same market. Remember, liveable space refers to a space that is available for everyday use and is properly finished, heated and ventilated. Your property will additionally be worth more if you have higher quantities of the following:
● Bedrooms
● Bathrooms
● Kitchens
● Parking or garage space
● Garden space
Property management
Property management is an important but often overlooked factor that will determine how successful your investment will be. You will have to find suitable tenants, manage repairs, conduct regular maintenance and deal with any other issues quickly. This will involve time, expertise and patience - which is why many prospective investors choose to work with a reliable property management company.
If you’re unsure about the investment property process, Lev Properties can help. We understand that as a prospective investor, you’re just as driven to succeed as we are. This is why we ensure that everything is taken care of on your behalf, from securing properties at auction to property renovation and securing a tenant, all the while maintaining clear and open lines of communication throughout every stage of the process. Contact us today for more information.