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Posted on 1st Oct, 2016

How To Know If A Property Is Worth Investing

For centuries, people have always chosen property to be a safe and reliable investment option. If you have always wanted to invest but never knew how to choose a property worth investing, read further:

The One Percent Rule

This is a simple and straightforward rule – if the monthly rent from the property equals one percent of the purchase price then it’s worth investing. Of course, if it equals more than one percent, you would be a fool to miss that property. There are people who buy properties that they believe will make money later, but if you are buying on mortgage, you’ll have to look for a house that pays dividends now – not ten years later. The rent from the house can cover mortgage and other overhead expenses.

The neighborhood

Look at the retail shops around you. Do you have a lot of high end of gourmet groceries shops around the property? If so, chances are you can rent them to well to do residents with a lot of disposable income. There have been several studies to prove that these stores have a positive effect on property values. Homes close to schools and colleges also have higher chances of people moving in, especially young families with children. Study the neighborhood and get a sense of things that happen here. Parks, walkable areas, crime rates, community sense, all of these help.

Good tenants

There are too many horror stories of tenants refusing to move out. Or, tenants who vandalize the property. There are tenants with questionable cleaning skills – as a result the thousands of dollars worth furnishings you installed recently looks rundown and worn.

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