Finding a hidden real estate goldmine is every investor’s dream. The key is to find the properties others may have overlooked. We will provide you with tips and strategies to find these hidden goldmines in our latest post!
So what separates a property from being a potential goldmine from being a pocket drainer? Just because it looks like a good deal on paper, doesn’t mean it is so. There are a few critical points to consider before making a purchase of a house in Detroit.
The Location Is Ideal
When you are dealing with a property in an incredible location, sometimes it pays to invest no matter what state the property is in. Sometimes, the land might be worth more than the structure itself! Work with a contractor that you know and trust to help you create a repair estimate. Then take a look at what other properties are selling for in the area. If you are able to fix up a worn down home in a thriving and popular location, you are sure to see a substantial return on your investment.
Great schools are a tale-tale sign of a great neighborhood. Families will usually factor in a school’s rating when they make their decision about where to move. Even if you don’t have kids, researching the area schools will give you a good idea of the neighborhood. You will likely find many families who are ready to put down some roots. On the other hand, homes near colleges and universities will likely have a higher turnover. If you are looking to rent out a property in a college area, take this into consideration and take the appropriate steps to ensure you always have a renter occupying the house.
Often times a beautiful home might be covered with bad wallpaper, stained carpets or a worn down and dirty facade. Bad cosmetic features can quickly turn off many buyers, thus causing the seller to drop the price. Look for ugly houses with good bones and you will likely find a real estate gold mine. So long as the repairs are strictly cosmetic, and the structure of the house is sound, buying an ugly house can be an incredible investment. Don’t waste your time on a house with structural problems. These will often lead to expensive repair bills for items you hadn’t even planned for.
Low Vacancy Rates
If you are looking for a real estate goldmine, you should take a look at the vacancy rates in the area. What is currently available? How long are properties being listed (for sale or rent) before finding a tenant? You will want to invest in an area that is in high demand as to ensure you will be able to quickly find a qualified renter or buyer.
Other Area Tenants
What kinds of businesses do you see in the area? If there are businesses in the area such as Starbucks and Whole Foods, it is safe to say it is a good area. These businesses spend thousands of dollars to scout good locations. They will not make the investment in an area they don’t perceive to be profitable. Take a page from their book when scouting areas for your real estate investments.
Future Development Plans
What will the area look like in 5, 10 or 20 years time? Contact your local building department to learn more about development plans in the area. A new shopping center, roads and infrastructure and even proximity to schools will all have an impact on the property’s value.