Buying your own house is an exhilarating experience. The feeling of having a home as an asset to your name is an unmatchable achievement for many. Future-proofing your investment property is crucial to maximizing its potential, regardless of your intentions to sell it at a higher price or to rent it.
What Are Homes With Investment Potential?
Investment properties are houses that you buy intending to make money from. This could be through monthly rental, resale after prices increase or both. It could also mean the house you buy to stay in, but many do not list their residential or vacation homes as investment properties.
Why Buy Houses With Investment Potential?
There are many objectives in buying an investment residential property, including:
- To generate passive income: A house rented out can provide a steady source of side income, which could help boost savings.
- As a safety net for the future: Properties with good investment prospects would sell for a reasonable resale price, providing a backup emergency fund if needed.
- To diversify portfolio: Property investment provides an alternative to stocks and bonds. A diversified portfolio generates a consistent income stream of different values at different times, potentially increasing overall returns.
- To make a profit: Selling a house with great investment potential at the right time would return a profit, which could cushion your income and savings.
- For tax benefits: Property owners get a slew of attractive tax benefits and exemptions.
How to Choose Houses With Great Investment Potential
Buying houses with a cohesive investment potential is essential to ensure your property provides good profit. Here are some areas you need to look out for:
- Location: Ascertain the property's location and whether it is viable for rent or resale. A good location should include schools, hospitals, public transport and other amenities that enhance lifestyle. Also, check if the neighborhood is safe — an attractive aspect to potential tenants or buyers. Examples of high-potential locations in Utah would be Salt Lake City and Park City.
- Condition: Properties needing consistent repair would drain your finances and reduce your profit. Old homes usually require more maintenance, but some new ones can also be defective. Check the house thoroughly for flaws and get a professional audit. If you plan to do renovations, add the budget to your expenditures beforehand so you don’t overspend.
- Future developments: Buying a house in an area expected to undergo infrastructure developments will bring more job and rental opportunities, boosting rent and resale prices.
- Vacancy rate: When buying a unit in a high-rise building, check its occupancy rate. A lower one indicates that the property is less attractive to potential buyers.
- Layout and design: Your property should suit your plan and the type of tenant you want. For example, buying a house facing south is great for solar panels if you plan to optimize the home’s energy efficiency.
Ways to Make the Most of Your New Home’s Investment Potential
One extra step between buying and profiting from a property is making it attractive to buyers or tenants. This is crucial in helping you find the right people, reducing the property’s days on the market and ensuring long-term tenancy. Below are some ways to increase its value:
- Modernize with smart and sustainable features: Update your home with energy-efficient items like LED bulbs and heating and cooling systems, opt for renewable energy sources like solar panels, and add smart appliances to reduce power consumption. Green homes are more popular in the market, with 52% of people willing to invest in a sustainable house.
- Renovate to improve selling features: If your budget allows, add rooms and areas that attract future buyers. Examples are separate entrances for different floors, play areas, a soundproof rec room and a sunroom.
- Improve curb appeal: A house’s exterior creates the first impression of the property. Indulge in some gardening to improve the outdoor area and invest in new paints and fixtures if needed.
Smart Investment Properties Build Better Financial Freedom
Your property can help you earn extra cash, build a portfolio and improve your financial status. Its appeal and functionality must be maximized to become a long-term reliable source of income.
Posted by Kristopher Larson
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