A common beginner mistake is picking a property because you think it looks nice. Location is singularly the most important aspect when it comes to picking a property. You can change the interior or the exterior of a house or a building. You can always customise however you want with minimal investment but you cannot take a property and put it somewhere else.
What makes a market and location attractive ?
There are a few things to consider when choosing a location for your property, but some of the most important are ; is it safe there? Are you going to be able to attract customers with increasing job opportunities or economic incentives? How is the infrastructure and schools in the area? These are important aspects to consider when choosing a location for a purchase.
Three main property types
- The first one is a single-family home. This is a potential good starting point however it’s only one stream of income, but it is simple to manage and has a low entry cost.
- Secondly, the multifamily home. This has a higher barrier of entry because it is more expensive to buy and harder complex to manage as there will be multiple tenants. However, if you’re up for the challenge, this will put you further ahead in the beginning as there is more than one stream.
- Finally commercial properties. These usually shouldn’t be considered by a complete beginner with limited the amount of capital to start with as there is more intricacies, complexities and laws to consider. These properties have huge amount of potential, especially if picked in the correct place, but can be a fast way to bankruptcy if somebody more experience than you manage to take advantage.
Logic over emotions
What you should not do is choose a place because it is familiar and comfortable. Instead, you should focus on numbers, statistics and information. Pick a place that you know will perform in the long run as this is a marathon notice a sprint.
And remember a good price in the wrong area is a bad investment
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