Tips for Investing in Vacant Properties
Vacant properties have great investment potential, especially since they are typically sold at lower than market value. This can be the perfect opportunity to bring in a hefty profit – if you select the right property.
How can you tell whether a vacant property will be a profitable investment or a dud? Here are a few tips for making this determination!
Inspect the Property
Before investing, have the property inspected. This will help you determine any major issues that you need to be aware of when deciding where to put your money.
Determine Your Expected Renovation Cost
Get some estimates for the renovations that you plan to do for the property. If the expected renovation cost is higher than your expected selling price, you’ll want to avoid the investment.
Conduct an Analysis of the Property
There are two types of analysis. The first step is to analyze the potential profitability and return of a specific property (such as your expected rental income, cash flow, and more). It’s also important to conduct a comparative market analysis (CMA) – compare your property to similar properties in the area to determine its potential value.