Spotting Profitable Real Estate Investments in 2023
With properties constantly coming on and off the market, it can be overwhelming to try to determine which ones would make great investment opportunities. After all, in today’s market some properties are gone within days and others are sold before ever hitting the MLS (Multiple Listing Service).
So, how do you navigate today’s market and find the profitable real estate to invest in? Which resources are available to help your search? To answer all these questions and more, here is a guide to help you find your next investment.
However, before we dive into the world of profitable real estate investments, we want to get you started properly with a pre-approval for your next mortgage. That way, you can maintain your profitable real estate cash flow with the best monthly mortgage payments. Get started today by clicking the link below to book a free strategy call with us today.
What Type of Investor are You?
Before committing to any type of investment it is important to recognize what type of investor you are. Are you a busy full-time worker who is looking to invest some of your earnings into profitable real estate? Are you a full-time investor with plenty of time to check on your properties?
Your lifestyle will greatly impact which types of properties would make viable investments. If you are already busy with a full-time job and a life outside of your investments, you may not want to buy multi-unit residential properties because they need a lot more active care, but not quite enough to warrant hiring a property manager without wasting time and money. Instead, single-unit residences and condos may make better investments because the tenants who live in them are more likely to view it as their personal home and take care of it, resulting in fewer calls to you for repairs.
If you are a full-time investor with a more open schedule, these multi-family units may be more up your alley because you have the time to check up on each one and care for them all. Once you have acquired more doors than you have time to keep up with or are making enough to take a step back and have someone else do the work, then you will want to consider looking at property management.
Discover How To Develop Profitable Real Estate With This Step By Step Guide
Understanding the Market
Depending on the region you are looking to invest in, different types of profitable real estate will be available and in-demand. It is very important to know what people are looking for, otherwise you may find yourself holding a property that you cannot fill or sell.
If an area is a constant beacon for tourists such as the Greater Toronto Area, you may want to consider options such as short-term rental properties to capitalize on the constant influx of people. Although it is important to note that short-term rentals do require a great deal of time and care to upkeep.
As well, some regions that have historically been poorer investments have begun to see massive growth. If you can get into those markets before the prices rise too drastically, you can experience a massive return on your investment from a single property.
Avoid Fixer-Uppers
Finding profitable real estate investments always comes with a reasonable expectation of risk, you should often avoid taking them whenever possible. By buying a property that needs repairs, you are committing to spend additional funds after the purchase of a property before seeing any return on your investment. While making those repairs will certainly increase the overall value of the home and help it to appreciate faster, you also run the risk of the market shifting during the time it takes to complete the renovations and losing out on very important profits.
Talk to Your Realtor
Realtors have the inside scoop on which markets and properties are going to be profitable. They see the prices rise and fall every time they take a client shopping and as a result, naturally have a good idea on where you should be investing your hard-earned money.
As well, many realtors and real estate agencies will do exclusive listings on properties before they are available on MLS. That means by the time the public sees a property, it is possible that the real money-makers have already been sold to someone else. So, it can be incredibly crucial to form a close relationship with experienced realtors in the regions you are hoping to invest in, or else you will miss out on that inside scoop.
This is even more important if you are planning to invest out-of-town because you are much less likely to know the exact ins and outs of that area when compared to your own hometown. While you may be unfamiliar with the area, they should be able to tell you which properties may have problems with things such as noise, poor neighbours, bad traffic, and low demand.
Consult Other Investors
While most investors are not going to divulge their entire strategies to you, many are more than willing to discuss what they look for in their own investments, especially if you are a newer investor. Ideally, you should look for a realtor who personally invests in profitable real estate. They will be able to provide you with both their market insight and experience in investments to help you maximize profits.
Consider Your Ideal Renter
Demographics are one of the main drivers of profitable real estate.
Different properties will attract different tenants. So, if you can envision exactly who you would like to do business with, that will help you decide what to invest into. If you are looking to rent to small families, you may not want to buy houses that are too close to bars or factories. However, if you are planning on investing into homes for factory workers, those homes near industrial districts may be a great investment because workers will flock to them in order to save money on their commute.
Know Your Budget
The rent you could charge on a million-dollar home is certainly tempting for investors, but if you cannot afford to buy those properties, you will waste time looking at them right now. Instead, you need to determine exactly how much money you can afford to spend on a property, so all of your time is spent effectively on profitable real estate you can afford.
One of the best ways to do this is to get a pre-approval from an experienced lender. This will allow you to have an idea of the maximum purchase price you can afford, while also securing the lowest available interest rates for up to 90 days and ensuring you are investing in profitable real estate with manageable rates. To begin the pre-approval process today you can visit LendCity.ca or give us a call at 519-960-0370 Alternatively, click the link below to book your free strategy call with us to discuss financing profitable real estate investments today.