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Five Things to Look for When Buying an Investment Property

As an investor and real estate agent, I am always looking at properties. There are five key features I would identify as the most important when looking to buy an investment property. Those five things are:

  1. Location! Location is very important because it helps to determine the resale value as well as attract the right tenants to your property. If you are looking to rent to families, consider buying in a location like a suburb that would be fitting for a family. To attract your ideal tenants, you have to think like them and consider every factor that will be important to them in a home. A family is going to want to be in a safe location, close to schools, amenities, parks, and possibly easy transit. If you are looking to attract young professionals, you will want to buy a property in a location that is central to the city. A walkable neighbourhood is attractive for young professionals that likely prefer to be close to shops, restaurants and city transit routes.

  2. Age and condition of the property: If you're buying an older home, you want to make sure it's been well maintained. The items that can be costly to repair/update are: foundation, roof, furnace, plumbing and electrical. Look for a property that has detailed maintenance records or has been owned by few people so that you are more likely to obtain the home’s history.

  3. Use a professional: When buying an investment property, you want to have the guidance of a professional real estate agent to provide important details. For example, you will want your professional to give you recent sales data for the area you are considering. You will also want to know the average increase for sale prices per year in that area. To ensure you have a good return on your investment, your professional will perform additional research to provide you with the necessary information to make a decision if that area is right for you.

  4. Property features: Look for a property with features that are going to be optimal for a larger pool of potential tenants. Avoid choosing a place with a unique layout because that is going to limit the market of tenants that are able to fit that layout. In addition, a unique layout will be less marketable to future buyers when you go to sell.

  5. Future development: Do research into the area of interest and look for the possible future development happening in that location. Buying in an upcoming area offers you the opportunity to have an income property in a community that is literally growing and that in turn will grow the equity in the property.

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