It’s unfortunate that many real estate investors tend to look at the bottom line when deliberating about a property, rather than the big picture. The real moneymakers in real estate investments are the people with vision, who think creatively, and are willing to assume some level of risk.

A client’s initial line of questioning about an investment property goes something like this: What has the property’s revenue been for the past three years? How much money will they make starting out? and, How much will they have to invest in the property in the beginning? These are all valid questions. After asking and answering them, investors might try taking off the blinders and thinking outside of the box.
Our population is growing, and land — unlike cars, furniture, or other structures — cannot be remade.

Real estate investors might ask themselves these simple questions:

1. Is there growth in the area where the property is located? Is there anywhere for the growth to go? If so, is it headed towards your property’s location?

2. Has the city or county zoned the are for revitalization or economic development? If so, are there any special funds or benefits available?

3. Is the property accessible to public transportation?

4. Are people beginning to look for homes in this area? If so, investors want to be looking far in advance of others to secure the best property deals.

5. Is the property value in the neighborhood in a slump or an upswing? Purchase during a slump for maximum profits.

The truth is, an investor does not make a profit from the property for the first two years. Investment property owners should be looking at the long-term, because they may make money over the next 15 years, while others are not.

Check County Records for Property Value
Do your research, or hire a REALTOR who is motivated to do it correctly. Speak to neighbors to understand the benefits of living there. Look at the neighborhood surrounding the area, and try to determine if those homes have increased in value. For a solid indicator, consider county property tax figures. In some areas, you will find a slight increase in the tax base of 1-3%. Tax base increases are linked to improved property value.

Are Revitalization Funds Available?

If your investment property venture is a legitimate business, contact the local Chamber of Commerce and county government to see if there are special funds available for revitalization projects. Most Chambers of Commerce provides such programs as well as classes where investors learn how to access these funds.

Thinking Outside the Box

There are many examples of properties whose potential has not yet been discovered. Remember, once you land that investment property of your dreams, make sure you have a marketing plan, which includes a decent web site, to launch your business. When speculating, trust your creativity and vision, and rely upon the expertise of a REALTOR who knows the area, and shares your vision.