Buying real estate is a process. Nowadays, there are multiple properties listed on multiple channels including newspapers, MLS, real estate agent listening, or online portals. Of course, real estate investors are always on the lookout for lucrative transactions. However, one very important parameter to buy a real estate property would be the evaluation of the property. There can be multiple factors which can be used to analyze and evaluate the property. Some of the important factors are listed in the subsequent paragraph. However, if an investor is interested in looking out for additional parameters, he can find out more by visiting the intelligent online real estate advisory portal at Rich Sam Academy.
Location of the Property:The location of the property is extremely important while going through the evaluation process. A property can be a good real estate investment if it is located nearby multiple amenities, and high population area would also come into play while making a decision.
Age and condition of the Property: The age of the property and its condition would also play a major part in evaluating the investment opportunity. Usually, the older the construction is, the less it is valued. However, if a property is considered a historical building, then it is highly valued and perhaps you will have to get a permission from the city authority so you can make any renovation. Also if the condition of the property is not in good shape, then you may want to consider and estimate the rehab cost which we will talk about it in another post.
The value of the Houses in the Neighborhood (Comps):The price of the property can be assessed by looking at similar properties within the neighborhood. A good rule of thumb, look for similar properties within one mile radius. If After Repair Value (ARV) of the property is within the same range of the comps, then you might want to submit an offer as soon as possible, otherwise, you may have to negotiate further or look at other opportunities.
Size of the Property: The size of the property has an important role in determining its value. When looking at comparable properties, or comps, you may want to identify the price per square foot. Once that done, you can estimate the value of your investment property by multiplying the price per square foot by the number of square feet.
Property Features: Multiple additional features such as nearby schools and colleges, crime rate, walking score, the supply of public water and electricity, as well as internet and cellphone coverage have a prime importance in evaluating your investment property.
To be on the safe side, run a quick research before finalizing your deal.
Recent Updates:Any recent renovation, such as new roof, window updates, painting, kitchen, bathrooms, floors, have an impact on evaluating the property and you must factor that before deciding to move forward. In the case of hardship such as foreclosure, death in the family or legal proceeding, the owner neglects the property. In such a case, you may prepare yourself to spend extra money to get the property in good living standards.