5 Factors To Consider For a Real Estate Investment

Be a Smart Real Estate Investor

Suppose you’re shopping for an investment property in the DFW Metroplex. In that case, there are some factors you should consider before making a deal. The real estate market is hot, but real estate investing is serious business. It can be a great way to make money and build wealth, but it’s not without risks.

To mitigate the risks, knowing the right things to look for is essential. Adhering to these factors will significantly increase your chances of a profitable deal. Here are the five most important factors to consider when making a real estate investment:

 

Location

If you’re familiar with real estate, I’m sure you’ve heard, location, location, location. It’s not just a saying. The location of the property is everything. You want to ensure the property is in a desirable area, close to shopping and schools, and has good public transportation.

Why Is Location So Important for Real Estate?

Location is vital for real estate because it is a significant factor in property value. The closer the property is to amenities and conveniences, the higher the value. And, of course, the higher the value, the higher the return on investment.

Since you won’t be living there, think about the wants and needs of future tenants or homebuyers. In these times, it’s best to think like an investor. Properties in prime locations will always be in demand.

 

Condition of The Property

You’ll want to inspect the property thoroughly before making an offer. It may not be worth your investment if the property requires significant repairs. Unforeseen issues have put numerous real estate investors out of business. So, if you’re not a seasoned investor, please be careful.

What If a Property Requires Repairs?

It’s essential to consult with a contractor to estimate the needed repair cost. You don’t want to overspend on a fixer-upper and end up losing money in the end.

Some common issues and repairs an investment property might need are:

  1. Roof Repairs
  2. Flooring
  3. Pests Control
  4. Plumbing Issues
  5. Heating and Air (HVAC)

Repairs can run from under $100 to $10,000+. So, as you can see, it’s essential to consult with a professional before making an offer on any property.

 

The Current Market Value

When it comes to real estate, timing is everything. If you purchase a property when the market is low, you’re more likely to make a profit when you sell. On the other hand, if you buy during a housing boom, you may end up selling at a loss.

Why is the Current Market Value Important?

It’s essential to know the current market value of the surrounding area. It will help you determine if the asking price is fair and whether or not it’s an excellent time to buy.

The seller may have overpriced the value of the property you’re interested in. Avoid paying too much by researching and consulting with a real estate agent familiar with the area.

 

The Deal/Numbers

Ensure you look at the correct numbers, not just the list price. You’ll want to look at things like the following:

  • mortgage payment
  • insurance
  • taxes
  • HOA fees
  • and the cost of repairs

Once you have all the numbers, you will have completed your due diligence and can make an informed decision.

 

Financing

Lastly, unless you are a cash buyer, you’ll need to get financing for your investment property. Real estate investor loans are different from traditional mortgages. They are much easier to obtain than traditional mortgage loans, but the interest rates are much higher.

Why Choose Hard Money Loans for Property Acquisition?

The great thing about hard money lenders is that they look at the potential value of the property and not your credit score. Hard money loans are outstanding for new investors and seasoned investors alike.

These are just a few things to consider before purchasing an investment property. Location, condition, market value, financing, and numbers are essential.

 

Choosing a Dallas Hard Money Lender

Now you know how location, condition, market value, financing, and the numbers impact a real estate investment. Are you ready to purchase a property in the Dallas – Fort Worth Metroplex? DFW Investor Lending, LLC is here to help. We are A+ rated hard money lender with the BBB and have numerous 5-star Google Reviews.

 

We offer loans for fixes and flips and buy and hold investors. Contact us today if you’re ready to start your next investment!

 

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