Buying a Home and Investment Property: What’s The Difference?
Having enough money to buy a property is exciting, but it can also be stressful. If you want to avoid the consequences of a bad investment, what you should do is decide if you are spending your hard-earned money on your primary residence, or investment property.
Here are the significant differences between the two, which can be helpful in evaluating your target property and making the best decision:
Which is Which?
A primary residence is merely a place you would call your home. It is supposed to suit your lifestyle preferences and the idea of the future you want for yourself. On the other hand, an investment property is used to generate profit through renting or appreciation. In other terms, when buying an investment property, your focus should switch from personal affinities to the property characteristics that would fit in with the property purpose.
While living in a bungalow might sound appealing to you, it might not prove to be a good choice for an investment property. Choosing to buy a single-family home, a condo, or a townhouse makes a big difference. There are many types to choose from concerning size, organization, and style, but when buying an investment property, you should do some research and decide which type is more appealing to the tenants, more suitable for renting, and appropriate for the market.
Location, Location, Location
These three magic words are what most people consider to be of the highest importance when buying a property. When it comes to the location of our home, we take into consideration certain aspects of our lives, such as work and family. Many of us want to reduce the time we spend traveling to work. We have or plan on having children, so we want to make sure there is a school district nearby. If we enjoy the busy city life, we will not opt for suburban tranquility.
Similarly, when picking a location for our investment property, we should make sure the neighborhood can accommodate the potential needs of our tenants or future buyers. For example, if we want to own a vacation rental, the proximity of tourist attractions becomes a priority. Don’t ever settle for an investment property you are not that happy with, thinking “Oh, this might work.” Never “might” your anything. Search for the property that will give you the best ROI.
The Property Itself
What proved as crucial for both home and investment property is making sure the property has some of the general requirements, such as proper installations and parking space. In addition to that, if you found an excellent location for your home or investment property, but the property itself does not fit, what we can do is explore its hidden potential. A small thing like adding a wall, or taking it down might bring great changes regarding spatial organization and could add value to the property. Therefore, acquiring floor plans might be a good idea. Your vision is what could be a life maker or a profit turner. Still, it’s not wise to immediately jump into enormous restorations and changes, at least not without prior consulting. It mainly applies to first and second-time property buyers.
While we can deal with the consequences of making bad decisions within our own home, such mistakes could be quite costly when it comes to investment property. Seek consultation with companies that can help with any property dilemma you may have.
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