If you are looking to diversify your investment portfolio, build equity, or establish a good source of income, real estate is a great option. But you have to look for the ideal property market to put in your savings.
With its affordable real estate options as compared to the neighboring cities of Boston and New York, community feel, and quality education system, Rhode Island is one of the best options in the country. In addition, it has a range of properties to fit investors of different financial needs.
The team from Stonelink Property Management has put together this article to advise potential investors on what they should consider when buying an investment property.
What’s Exciting About Rhode Island?
During this era of inflation, rising interest rates and tightening budgets, investors are looking for lower-cost ventures that will give them good returns, while acting as a hedge. Compared to its neighbors, the cost of property in Rhode Island is quite affordable. You can enjoy a similar rate of return with bigger cities at a lower initial cost of investment.
It is almost impossible to stay indoors in Rhode Island. The area is peppered with numerous attractions and activities that you can explore and enjoy. Some of the notable options include state parks, biking/hiking trails, and beautiful beaches.
We understand that not everybody is a fan of the outdoors. Should you want a more relaxed option, Rhode Island has several museums that would be ideal for you. They depict the rich history that the area has.
The quality of education is another attractive feature of Rhode Island. The public system is known for its quality programs that give children the solid foothold they need. In addition, Brown University, one of the leading universities in the country, is located on the east side of Providence.
Tips When Buying an Investment Property
Pick the Right Neighborhood
It’s important to carefully consider the best area to invest in Rhode Island. In most property markets, you will be faced with two options: do you invest in an established market or an up-and-coming neighborhood?
An established market is one that has been invested in for years. It has the amenities that most renters are looking for and thus the demand for property will be high. This demand translates to a higher price point. You will have to part with more of your capital to acquire an investment in such a neighborhood.
You can also consider up-and-coming neighborhoods. These are newer options or master-planned communities. Such places are projected to enjoy an increase in demand in years to come and are sold at lower prices. Investing in a new neighborhood can be a risk as one is hopeful of increased demand and property appreciation.
New construction in new neighborhoods are also less likely to need much maintenance or upgrades, as the homes have been built with modern standards in mind, so it can save you money in the long run.
Crunch the Numbers
While you might be lured in by the amenities offered by a property, you should try and be rational about the purchase. What matters, in the end, are the numbers. What are the projected maintenance and management costs? How much will the property rent for? Is its potential ROI competitive? You will need your honed mathematical skills to create a proforma that is both realistic and representative.
Approach a local property company that has historical information in your area of interest. Request for information on rent prices, maintenance costs, occupancy rates, turnover costs, and appreciation rates. This will set you up perfectly for you to perform an analysis of the area.
Develop Networks in the Area
As you prepare to decide on your property, you need to develop a network with professionals in the area. You will need to rely on sound and professional advice from lawyers, insurance experts, and property experts.
There is also the issue of property maintenance to consider. You will need reputable contractors and handymen who can repair your property at a reasonable price. This includes plumbers, electricians, landscaping experts, and roofers among others.
With a large network by your side, you should be able to make an informed decision on whether a property is the best choice for you.
Management of the Property
In such a competitive market, it is the quality of the management that will retain the tenant on your property. Are you able to respond to their needs on time? Is the property in good condition at all times? For a comprehensive solution, you will need to dedicate a significant amount of time and money.
If you feel out of your depth, consider outsourcing management of your property to a reputable and experienced firm. Serving landlords in Woonsocket, Central Falls, Providence, Warwick, and Pawtucket among other Rhode Island areas, Stonelink Property Management is the company to rely on from tenant screening to maintenance and everything in between.
We are a full-service property management firm with over two decades of practical experience. Our brand is synonymous with experience, comprehensive property solutions, and professionalism. You no longer have to stress about the management of your property with Stonelink Property Management as your service provider.
Match Your Investment Goals
Before you invest in property, sit down and ask yourself what your goals are. Are you more interested in a long-term investment with consistency in rental income? Or are you looking for a short-term investment?
Depending on your investment goals, there are some property options that will stand out as better options. House-flipping might be the ideal option for a short-term investor while a rental option (whether residential/commercial) might be better for a long-term investor.
You must also consider the different economic activities that contribute to the success of an area. The demand for property in an area may be supported by a strong hospitality culture, a vibrant industrial enterprise, or a leading university.
Make sure that your investment contributes to or complements the pull factors in the area.
Bottom Line
Purchasing an investment property could be the decision that takes your portfolio to the next level. By following the advice that we have offered above, you can enjoy an appreciation in value, good returns, and consistent rental income.
Do you need more advice? Are you considering investing in Rhode Island real estate? The company to rely on is Stonelink Property Management. We have the expertise and experience to guide you through the entire process.
Get in touch with us today.
