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Finding the perfect investment property can be daunting for anyone, especially for first-time investors. There are many metrics and factors to consider, and this real estate market is not always easy to navigate.
There are a few things you are most likely looking for in an investment property:
1. A good neighborhood
Location is one of the most important aspects of a home for prospective buyers. It also determines what kind of tenancy you will attract. For example, are you near a university? Chances are, you will see students flooding your applicant pool. If that’s not something you’re interested in, choose a property in a suburb to bring in young families, or in a bustling area with young professionals.
2. Low property taxes
To make the most profit, you want to cut down on any expenses and fees with your investment property. One of these expenses is property tax.
Property taxes can sometimes mean a valuable home that will attract quality, long-term tenants. However, there are also undesirable locations that demand high property taxes. These are the areas you want to stay away from to maximize your returns.
3. Job market
It’s a good idea to look at the employment rates in the areas you’re considering investing in. The more employed applicants you have, the less turnover and missed payments you’ll experience.
If you notice a large corporation coming to town or a new plant opening near you, it may be a good time to look to invest in that area. Employees eager for housing will flood the neighborhood.
Related: Want to Invest in a Rental Property? Do These 5 Things First.
These factors are only some of the things you should consider when choosing an investment property. It can feel impossible to find something that fits within the categories you’ve set out, especially when there seem to be unlimited online resources that claim to have what you’re looking for.
Which websites are worth your time? How can they help you find the best investment property in your budget that fits your needs?
Here are a few solutions that will aid in your property search.
1. National Association of Realtors (NAR)
The National Association of Realtors (NAR) is an established group that has long been a prominent player in the real estate industry. It represents over 1.4 million real estate professionals and protects the interests of its members. NAR also advocates for fair homeownership practices and property rights and remains one of the best real estate websites.
You will find a plethora of educational resources on NAR’s website, making it especially helpful for those new to the field. You can also find valuable real estate data and other tools that can help both buyers and sellers.
One of the most helpful aspects of NAR’s website is its search function. Users can find realtors in their area, whether you need a professional to help in your search or just need someone knowledgeable about the area to chat with.
The most important part of your investment property purchase is preparation. Make sure you talk to as many experts as you can to ensure that your upcoming investment will be likely to pan out.
Related: How to Identify Strong Real Estate Markets for Your Next Investment
2. Zillow
Zillow is one of the most popular real estate websites out there, and it is used by many real estate agents and house hunters.
The reason for Zillow’s popularity is in part due to its detailed info on a variety of properties. You can filter through homes based on specific criteria like location, price and property type.
Zillow also offers its users the chance to see the home in an entirely new light with high-quality photos and virtual tours. It also gives you in-depth information regarding the estimated property value, sales data and other information you may want, like what the surrounding school district or neighborhood amenities are.
Investors will benefit from Zillow’s interactive map, which lets them see the location of each property and the surrounding area. As we mentioned earlier, location should be a large determinant of an investment property’s viability. Be sure to use the tools Zillow offers to be fully informed on the surrounding area and what kinds of tenants you will likely experience.
It can also be helpful for investors to use Zillow’s mortgage calculations and affordability estimates, since this is an investment property after all. Use these tools to help you estimate what you will make in returns each month, but keep in mind that these are estimates. You will still need to do your own calculations or consult with a trusted financial expert to have more precise information.
3. MLS.com
What is the MLS?
The Multiple Listing Service, or MLS, is a network of private databases of property listings. This database is funded and maintained by real estate professionals who also use the data to aid with their own businesses.
The listing website MLS.com is an unaffiliated search tool that will let you find listings for sale by realtors in your area, all of whom are members of your local MLS. It’s important to note that MLS.com is not associated with the larger MLS system, and it’s independently owned and operated.
However, MLS.com remains a helpful resource for investors looking for their next investment property. MLS listings tend to attract top dollar since they receive extra exposure and provide unparalleled access to those who utilize the system.
MLS.com also offers information on foreclosed properties, which can offer the most bang for your buck to investors or flippers looking for quality house-hunting websites.
Related: 3 Things to Consider Before Buying an Investment Property
Any investment venture involves a fair amount of risk, and real estate is no different. Although using the websites mentioned above can help you mitigate some risk through preparation, do not expect to have immediate success.
Use these tools to find potential properties, then continue to research the property with a trusted professional or friend within the real estate investment space. While filtering through these options will start you out on the right foot, you will have to take the process from there with a fair amount of caution.