NYC — Real estate investment is a complicated endeavor. That being said, there are five main factors we always consider before recommending an investment.
The first factor may appear to be cliched, but cliches become cliche for a reason, don’t they? Location. Will you want to own this property, in this place ten years from now? More important than demand for residential or office space in a particular place now, is whether or not there are reasons for people to be relocating to your potential investment site within the next few years.
Next, you’ve got to look at the credentials of your developer. No matter how incredible the property, the site will not turn a profit without careful development. Developing is one of those fields that requires references. If they’ve got a great track record, than they’re significantly less likely to fail.
Because property is a finite commodity, being able make a value investment is important. Buying an existing property, rather than building a new one for a higher cost, is always the way to go.
Real estate investment is a long game. And as such, it’s important to always choose quality over cost. Low-quality properties are potential sinkholes. Paying more upfront and avoiding costly repairs and maintenance later is always the smarter course of action.
Finally, let’s look at leverage, or debt. The higher the leverage on a property the bigger both the risk and reward. This is where real estate investment gets a little complicated, but the gist is that while you get greater returns for each dollar you put into the property, a property that goes into foreclosure is worthless. Choosing a property that has a leverage percentage of between 60% and 75% is probably your best bet.
For all of your real estate investing needs, contact Skyline Properties. Our experts are waiting to help!