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An investment property is a great way to generate passive income and diversify your financial portfolio. Real estate investment can prove to be a lucrative venture for those seeking to make a name for themselves in the industry and ensure a healthy financial future.
When choosing your first investment property, it’s important to keep several factors and qualifiers in mind. Here are a few tips for investing wisely. Also, make sure to consult your financial professional for expert and personalized financial advice.
1. Make sure you can afford it
The most important part of investing in real estate is making sure you can afford it. You want long-term debt locked in for as long as possible so you’re not forced to sell due to market fluctuations.
Ensuring your financial status is healthy enough to branch out into investments is the first step you should take when seeking an investment property.
2. Take advantage of low loan rates
There are currently very low borrowing rates that are available. You can take advantage of this, borrow at a low rate and then purchase a property that’s in high rental demand.
3. Start small
Beginning your investment portfolio with a small, single-family home or duplex is a smart start. Seeking smaller properties in areas where prices are more affordable can be a great way to set a solid foundation for your investment future.
4. Location, location, location
We cannot stress enough how important a property’s location is, especially when it comes to investing. A long-term investment means you want to purchase a property that is well-located and in an up-and-coming area.
Walkability and area amenities are crucial, but also ensure that the home is not located directly next to a noisy street or freeway.
5. Keep it low maintenance
Find a property that requires minimal work and is easy to maintain. Making sure the structure of the home is sound and the interiors are up to date ensures you don’t have to worry about spending a lot of money on renovations at the onset of your investment.
All in all, choosing the right investment property is an important decision, and many factors play into guaranteeing a successful investment. Taking advantage of low borrowing rates, choosing the right location, starting small and making sure you can afford your investment is incredibly important.
With market fluctuations and an evolving economy, investing in real estate can prove to be a profitable insurance policy for your financial future.
David Parnes is a director at The Agency in Los Angeles. Connect with him on Instagram. James Harris is a director at The Agency in Los Angeles. Connect with him on Instagram.
