Buying Rural Property: How To Get A Good Deal
These Crucial Factors Determine If A Home Is A Good Deal Or Not!
It’s true that every homebuyer wants a good deal when buying rural property, but location and condition are the two primary defining factors.
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These crucial factors determine if a home is a good deal or not.
While price does matter, finding a rural property that can be completely overhauled with a very small amount of effort is not easy.
There are quite often hidden challenges and problems and on top of this, a lot of big jobs are not easily identifiable.
If you want to make sure that the property you are buying is going to be suited to you, then take a look below.
Follow The 1% Rule
There are many ways for you to try and evaluate your investment returns when you buy an income property.
One rule of thumb would be for you to use the 1% rule.
The 1% rule states that your income for the property should be 1% of the purchase price so that you can get the biggest positive cash flow.
If you intend on renting out the property for sale, do your bit to make sure that there are fair rental rates in the area, as this will help you to ensure that you are getting the best deal.
Check The Cap Rate
It’s very important that you check the cap rate.
The price per square foot or even the price per door is a very important metric if you can use it properly.
You will often see smaller properties go for a lower price when compared to big properties, and this is completely normal.
If you can use your price per square foot metric though, you may be able to distinguish a good deal from a poor one with ease.
Look At The Roof
Look at the roofline of the property you’re considering.
Does it look sturdy, simple, vulnerable or weak?
Is it an original roof or has it been added to over time?
Will it drain well?
Things like this can give you a fantastic insight into the rest of the property and it will also help you to determine whether you are getting a good deal.
Condition And Presentation
The condition of the property and the way that it has been presented will often tell you a lot about it.
If you notice that there are no online photos of the property, then this can indicate that it has no appeal.
It also means that you may be able to offer a significantly lower price on the property.
The listing agent may not have a great deal of things to work with and they may well be after a quick sale.
Purchase Price Vs County Appraisal
You can determine if a property is a good deal or not by looking at the county appraisal district site.
Put in the address, and if you notice that the price is below the county’s value number, then there is a very high chance that you will profit when the time comes for you to sell the property.
Why is this?
Because fair market value is usually determined by the appraisal value, plus 20%.RuralMoney.com
Always Insure Your Property
There are many reasons why you should always insure your property.
One reason is that your local homeowner’s insurance policy can help protect you financially in a fire, burglary, or other types of disaster.
If something happens to your home or belongings and you don’t have insurance, you could be left with a substantial financial burden.
Another reason to insure your property is that it can help you get back on your feet quicker if something does happen.
If you have insurance, your insurer will help pay for the costs of repairing or replacing your property.
This can save you a lot of time and money and allow you to get back to your life faster.
Related Post: 4 Easy Ways To Market Rural Property For Rent