There’s a lot to consider when choosing investment properties in Plano, TX. Property is a big investment, and before you make the commitment, you’ll want to consider all angles and make an informed decision that will help you reach your financial goals.
Here are five rules of thumb for analyzing investment properties in Plano, TX that will help you make the best decision for you and your investment business.
Consider Cash Flow
From a financial standpoint, there’s one major thing to consider when analyzing investment properties in Plano, TX: cash flow.
Cash flow refers to how much money you’ll have left per month after paying all the bills. Subtract your monthly expenses from your monthly rental income, and you end up with your cash flow. It is HUGELY important when analyzing Plano investment properties and determining whether they’re the right long-term fit for you.
Obviously, a significant amount of expenses comes along with owning a rental property. There’s the obvious costs like your mortgage and taxes, but you also need to factor in things like insurance, water, snow removal, lawn maintenance, property maintenance, repairs, vacancies… The list of potential expenses for a rental property is long, and additional expenses pop up all the time. When analyzing Plano investment properties, you need to be sure that the rental income you’ll bring in from the property is enough (and ideally, more than enough) to cover any and all expenses for a positive cash flow.
Know the Plano Investment Property Market
Before you start analyzing investment properties in Plano, TX, it’s important that you do your homework and know everything there is to know about the Plano market. Knowing the market is a must for making sound investment decisions.
Read up on what’s happening with mortgage rates, employment trends, and the overall market. Educating yourself will allow you to better analyze each individual property and make a fully informed decision before moving forward.
Be Creative and Think Big Picture
When analyzing Plano investment properties, it’s a better strategy to focus on the big picture, not the small details. No property (or at least very, very few properties) are going to have everything you’re looking for. But that doesn’t mean they’re not the right fit for you in the grand scheme of things.
For example, maybe you were set on finding a property with four bedrooms, but are presented with an investment property that only has three. Look at the big picture: Does it have everything else that you’re looking for? Is it in an up-and-coming neighborhood in Plano that’s showing a steady increase in property values? Is there a basement you could finish to add an extra bedroom?
Thinking big picture and not getting caught up in the small details of the property can help you make better investment decisions.
Think Long Term
Just as important as thinking of the big picture is thinking long term. You want to be sure you’re making an investment that’s in alignment with your long-term investment goals and preferences.
For example, do you ideally want to get renters that stay for years at a time? If so, it wouldn’t make sense to buy a property right next to the SMU campus that’s popular with students. Or are you looking to flip a property quickly? Then it wouldn’t be logical to invest in a property that’s going to take years to repair and rebuild.
Before you commit to a property, be sure it makes sense for you – not just today, but in the future.
Know What to Avoid
As important as it is to know what to look for when analyzing Plano investment properties, it’s equally important to know what to avoid.
This goes hand in hand with knowing the market, but it’s important to know the characteristics of a property that should make you run in the other direction.
Is there a certain area of Plano that has disproportionately high taxes? Or is there a neighborhood that looks great on paper but has higher crime rates than the rest of the city? Is there anything in close proximity to the property that could drive down the value?
Having a list of things to avoid can keep you from jumping into an investment that isn’t the right fit for your goals.
Follow these five rules of thumb and you’ll be able to make an educated analysis on investment properties in Plano, TX. If you need help choosing the right investment property for your needs, give us a call at 888.657.3033.