There are four key factors you must consider when evaluating your Prescott income property and residential real estate for investment: Location
In the real estate business location is said to be the most important factor. In the Prescott Arizona income property market, the same is true. Location will help to determine demand and rental income potential. But since you are may also want to live there set your own criteria first. Do you want to be close to work, school, shopping? Gain an understanding of what neighborhoods and attributes you can reasonably expect within your price level. Do not have lofty expectations about areas or property size – research the various income properties in all areas of your city to determine reasonable parameters for your decision-making. Ask yourself: Would you want to live there?
Determine what type of income property best suits your investment goals (duplex, triplex, rooming house, etc.) For example, if your goal is to live for as little per month as possible then you will likely need to find a property with multiple rental units to offset the amount of your mortgage. Or, if you just want a little income to offset your monthly payments and you would like your commitment to be as minimal as possible, you may want to search for a single-family home with an in-law suite or basement apartment.
Aesthetic Appeal and Property Features
Give some thought to the style and look of the Prescott income property for which you will be searching (architecture, type of dwelling space, etc.) How important is what the property looks like? Keep in mind that the more attractive your property the higher the potential to generate higher rents and to attract more discerning tenants. Separate your needs (features or aspects of an income property that you must have) from desires (features or aspects that would be nice to have, but not imperative). Consider whether factors like building type or architectural style are important to your purchase decision. Do you only want to consider a detached dwelling? Or is a semi-detached or condominium suitable. Make a priority list of all the features that you must have in your property and rank them in order of importance.
Renovations and Improvements
Determine if you are prepared to do major, minor or any renovations or improvements to a property. You may find properties in Prescott Arizona that meet some of your highest priority needs like neighborhood and size, but do not meet your needs in terms of quality. Are you prepared to bring a potential property up to the quality you desire? And if so, what is your improvement budget? Creating value in your property through renovating is an excellent way to improve your equity.