There is no single perfect investment property that’s going to make sense for every investor looking to buy. When you’re looking at potential acquisitions, you don’t have to choose something that’s perfect – you have to choose something that’s perfect for you.
When you’re looking for real estate in the Albuquerque market, many of the general rules will apply. You have to consider a property’s location and size, as well as condition and age. You’ll know it’s a good investment if you’re sure tenants will be willing to rent it for the amount of money you’re planning to charge.
In the end, it’s a very personal decision and it depends a lot on your investment goals. There are a few specific things you should consider when you’re looking for your own perfect investment property in Albuquerque.
Let Investment Goals Lead the Way
Your perfect property depends on your investment goals.
What are you hoping to accomplish with your property? Will you use the property as a potential retirement home in a decade or two? Will you hold onto it for as long as it’s providing cash flow, or are you more interested in long term appreciation gains?
It’s important to understand where the strengths and challenges of your investment strategies are found. While it may seem early to think about exit strategies, you’ll need to think about what your ultimate plans are and whether you’ll eventually sell this property, use it in a 1031 exchange, pass it onto a child or grandchild, or do something else. Think long-term.
Decide what makes the most sense financially for you now and in the future. This will help you identify investments that are worth your time and money.
Get to Know the Albuquerque Rental Market
Before you invest in a rental property, make sure you understand the Albuquerque rental market and its specific neighborhoods. You’ll need to know the tenant pool and what the best residents are looking for. You’ll need to understand rental values and how much you can expect to earn.
If you want to choose the right investment property, you’ll have to invest the time that’s required to research rental values, rental property vacancy and occupancy rates, and neighborhood demographics. Do this before you buy so you aren’t surprised by what may or may not work for you.
Consider Costs and Maintenance
When you’re picking the perfect investment property, make sure you choose one that isn’t going to drain your finances. Budget for what it will cost to maintain your rental property. Many investors are surprised at what they have to pay to keep a home well-maintained. The home’s age and condition will impact your maintenance costs, and so will your tenant retention. If you have someone new moving in every year, you’ll have higher turnover costs.
The size of the property will also impact its maintenance costs, and the type of property you buy will also determine what you spend. Condos might have lower maintenance costs because there’s an HOA taking care of exterior maintenance issues. But, you’ll also have to include those HOA fees when you’re working out your cash projections and establishing ROI goals.
Work with Albuquerque Property Managers
The best thing you can do is to talk to an Albuquerque property manager before you buy a rental property. Your Realtor can do a great job helping you see potential homes and negotiate the best deal. With the advice and support of a property manager, you can decide whether or not the investment makes sense from a rental standpoint. We know the rental values, the tenant pool, and the market trends.
If you’re looking for the perfect investment property, we can help. Contact us at Bruni/Karr Rental & Management Agency for more advice and resources.