How to Know Your Market — And Why You Need To Know It
This entry was posted on Mar 26th 2018
One of the first things any real estate investor looks at is a property's market. Consider it the landscape, but as with any landscape, an investment property's market is filled with details and nuance. What may appear to be a local nuance could end up being a major detail that could make or break the investment. At Rabell Realty Group, we're real estate professionals who've spent years exploring the Gainesville, FL, market. In that time, we've gleaned a lot of information that we want to share with property investors like yourself!
How To Understand Your Investment Market
Search engines, apps and other property investors are great sources for initial research on property investment markets. But you’ll want to zero in on the specifics of Gainesville, FL, to ensure the information you find online matches the local market.
Research, Research, Research
Investing in property is the same as buying a home. With financial resources at stake, your inquiry should go well beyond finding a property within your budget. Speak with other home investors in Gainesville to find out what investigation methods they follow before settling on an investment. While there is no such thing as too much research about the property market, insufficient analysis could result in financial blowbacks. Here are three areas to add to your research list.
Local Rental Market
What the local rental market is bearing determines whether your investment will have a return. If your property’s projected rent is higher than what nearby properties are charging, you’ll need to either readjust the rental expectations or plan to renovate the property to demand higher rent.
Knowing what a property has been or could be zoned for is the best way to determine its full potential. If a property investor has his or her sight set on a residential property one day becoming a commercial establishment, the City of Gainesville’s zoning codes could help or hinder the investor’s vision.
Current Cost of Ownership
When inquiring about how to invest in property, an area that is easily overlooked is the current cost of ownership. Property taxes, insurance and monthly utilities may seem run-of-the-mill, but consider them a reflection of the property’s condition. For example, high utilities may signal an outdated or inefficient HVAC system that needs replacement. Keep in mind that current costs of ownership can vary in the same geographic area, such as a neighborhood, because of a specific property’s condition.
Check Recent Sales
Recent sales are often a great gauge for how a neighborhood is doing. Sale prices trending upward show current or potential demand, whereas downward trends should raise an eyebrow and a few questions. Buying an investment property is meant to give you a long-term investment and return, so if a property is located in a downward-trending area, it’s okay to pass on it.
Take a walk through the neighborhood or nearby area and talk with current residents and business people. They’ll have on-the-ground insight and information that very few websites or periodicals can provide for a property investor. Plus, local residents may tip you off on the best places to invest in real estate locally. Plan on making time to speak with someone in the City of Gainesville and Gainesville Chamber of Commerce’s development areas. Knowing of any local development plans could help you make decisions about investment properties.
Why You Should Know Your Market
Real estate anywhere is cyclical, and when you enter the field, the cycle will greatly impact how your property investment does in the short- and long-term. Real estate investing in Gainesville is no different. The city is currently experiencing a growth trend, but as we all know, trends can change quickly. Having a solid understanding of the market before you sign a mortgage on an investment property will prepare you for a wide range of potential scenarios and increase the chance of your portfolio of properties growing soon. A better understanding is also associated with a higher return on investment.
Home Investors in Gainesville, FL
Any time people consider an investment, their end goal is to make more money off it than what they initially put into it. For many, buying an investment property winds up being a great decision, especially when they team up with Rabell Realty Group. Every day we work with new and seasoned investors, helping them find a property that will earn them the return on investment they seek. To get started with real estate investing in Gainesville, contact the professionals at Rabell Realty Group today!