Things to consider before buying an investment property

Real estate can be an incredibly fruitful investment. Buying a property at the right time can provide investors with a substantial return when they decide to sell, and that opportunity compels many men and women to consider investing in real estate.

While there’s no denying real estate can yield a great return on buyers’ initial investments, there’s more to making money in real estate than simply buying a property and waiting for its value to rise. Buyers who are thinking of investing in real estate should consider a host of factors before purchasing an investment property.

Price trends
Recent sale activity in a given town or neighborhood is something prospective real estate investors should study before buying an investment property. Would-be real estate investors can explore real estate websites such as for recent sale information, which may also be available through local government agencies. Such data can be invaluable, showing potential investors which neighborhoods are in demand and which may be in decline.

Investment properties are not eligible for as many tax benefits as primary residences. However, landlords can write off repairs, management costs and other fees associated with rental properties. But it’s not just their own tax bill prospective investors should consider before buying an investment property. Many potential buyers down the road may prefer a property in an area where property taxes are relatively low, so even if you can afford the tax on the investment property, you may find buyers are unwilling to assume that burden when you put the property up for sale in the future.

Prospective real estate investors no doubt know the value of location with regard to real estate, but if you can’t afford to buy in a neighborhood that’s currently hot, that does not necessarily mean you can’t still capitalize on that area’s popularity. When a town becomes popular, its property values rise, and many buyers find themselves just barely priced out. When that happens, the surrounding towns tend to become the next hot neighborhood, as these areas are nearly as close to the attractions that make the initial neighborhood so desirable. Buying on the outskirts of a hot neighborhood can set you up to benefit nicely when that area gets too pricey.

School systems should be examined even if you do not have children. In a recent survey of American home buyers, 35 percent of respondents with children under age 18 indicated they want to live in great school districts. has profiles of 200,000 public, public charter and private preK-12 schools. Investors can use the search engine to find information about local schools and school systems so they can better position themselves to buy properties in areas that will appeal to buyers down the road.

Real estate can be a fruitful investment, and investors who want to benefit the most from their properties will explore various factors before purchasing a home or homes.