How to Tell if a Property Will Be a Good Investment

With the rising popularity of shows like Flip or Flop and Fixer Upper, more and more people have started investing in properties that could use a little extra love. Remodeling a home to suit your wants and needs rather than purchasing a brand new home can be a rewarding experience, which is why so many people have opted for properties that have seen better days. Many older, more run-down homes have a lot of hidden potential just waiting to be discovered, and remodeling a home into exactly what you want can be a better investment in the long run. If you’ve been thinking about flipping an older home, here are a few ways to tell if a property is worth the investment.Property investment

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Determine the condition of the property

One of the first steps to determining if a property will be a good investment is if it is in decent or at least fixable condition. While most fixer-upper properties aren’t typically in the nicest of conditions, that doesn’t mean you should take on a house or building that has irreparable damage. Major foundation issues, structural problems, or any pest infestations that won’t go away are just a few things you might run into that you shouldn’t overlook. These issues can pose a problem for you later on, and could likely end up costing you even more money in the long run. If you’re completely in love with a house, however, you could always do a quick Google search of “how much is house worth” and make the call for yourself.

Check out the neighborhood

Whether you’re planning on flipping a property for a profit or decide to live there yourself, it is always a good idea to check out the neighborhood and surrounding areas before purchasing a home or building. The safety, school district, and overall quality of life in an area can make or break your experience when flipping a property, so make sure to spend an adequate amount of time in the neighborhood before taking the plunge. Even in a relatively safe, quiet area, things like walkability, access to public transportation, and the distance to the closest grocery store can have a significant impact on whether or not a particular property will make a good investment, so be sure to keep these things in mind.

Consider the After Repair Value (ARV)

One of the most important factors to consider when determining if a property will be a good investment is the After Repair Value or ARV. The After Repair Value simply refers to what the property will be worth after all of the necessary repairs have been completed. You don’t want to end up spending a ton of money fixing up a property only to find that it wasn’t worth the investment, so be sure to calculate the ARV before purchasing a property.