With real estate remaining a popular investment asset class, many investors are looking to purchase investment properties near their primary residence. Proximity can make it easier to manage and maintain an investment property. However, finding and evaluating potential real estate investments in your local area requires research and due diligence. Here are some tips for locating and assessing investment properties near you.
Utilize Online Listings and MLS to Find Nearby Investment Properties
The internet makes it easy to search for real estate listings in any geographic area. Look for websites that allow you to filter searches by property type, price range, neighborhood, and other criteria important for investment properties. You can also work with a knowledgeable local real estate agent who can provide access to MLS listings and support your search. Focus on multi-family, mixed-use, and commercial properties which often make the best investments.
Drive Target Neighborhoods to Identify For Sale Signs
While online searches are important, don’t underestimate the value of driving around potential investment areas to look for ‘For Sale’ signs. Some of the best deals may not be listed online. Focus on neighborhoods near employment centers, public transportation, and amenities. Also pay attention to emerging areas undergoing revitalization.
Evaluate Property Fundamentals Like Cash Flow and Appreciation Potential
Once you’ve identified potential investment properties nearby, dig into the fundamentals to determine if a property is likely to produce returns that justify the risk. Estimate cash flow based on market rents and expected expenses. Consider appreciation potential based on market trends. Drive by the property at different times to assess the surrounding neighborhood.
Inspect Properties Thoroughly and Obtain Professional Property Inspections
Prior to making an offer, thoroughly inspect potential investment properties yourself to identify any major defects or issues. Also hire professional inspectors to evaluate structural, mechanical, and environmental conditions. The upfront costs are well worth avoiding major issues down the road.
Consult Local Real Estate Professionals for Insights on the Area
Connect with experienced real estate agents, lenders, appraisers, and other professionals who are very knowledgeable about the local real estate market. They can provide invaluable insights on prices, rents, trends, and factors to consider regarding specific neighborhoods or properties. Their perspectives can help you make informed investment decisions.
Finding and evaluating investment properties near your home can be rewarding but requires significant research and due diligence. Utilize online listings and drive target neighborhoods to identify prospects, then carefully assess fundamentals, inspect thoroughly, and consult local real estate professionals to make informed investment decisions.