Are you considering investing in the Columbus, Ohio real estate market? That’s great! To make sure it’s actually an investment and not a liability, it’s important to treat real estate investing as a business and like any business you should focus on maximizing profits and minimizing expenses. A key aspect of this approach is learning how to identify and avoid bad real estate investments. By scrutinizing potential investments and making informed decisions, you can significantly reduce the risk of financial disasters. In this in-depth guide, we will explore the critical factors that differentiate a deal from a dud when investing in Columbus, Ohio real estate.
Comprehensive Market Research
Conducting thorough market research is essential for avoiding a bad investment in Columbus, Ohio real estate. By examining factors such as competition, demand for the property, national and local real estate trends, laws, and other market influences, you can gain valuable insights into the potential success of your investment.
Let’s be honest. Real estate is trendy right now. There is a belief circulating around currently that real estate is alway a good investment without any regards to where we are at in the business cycle or to the greater market forces. My point is this. There are a lot of cross currents when it comes to investing in anything whether it be stocks, bonds, crypto, precious metals, or even real estate. Right now, investors need to weigh more factors than ever when doing market research to determine whether a deal is actually a deal before they get saddled with ever increasing illiquid assets like real estate. Staying informed about market dynamics will enable you to make well-timed investment decisions and minimize the risk of failure.
Strategic Location Selection
The location of your real estate investment plays a significant role in determining its profitability. By carefully selecting the location of your property, you can protect yourself from buying properties that won’t maintain their value in the long term. For example, commercial properties benefit from proximity to busy roads, while residential properties may lose value in such locations. Water views or water frontage often increase property value, and potential future developments can impact the desirability of the area. Remember that while you can usually improve existing structures, it’s impossible to change the location of a piece of land and the land is what you are ultimately buying.
A large factor that should be considered when selecting a property is where are people moving to and why? For example, in New Albany there is a large semiconductor plant coming into town. This is long-term employment and will probably drive up property prices and rents for considerable while.
Rigorous Due Diligence
Following a systematic due diligence process is vital for avoiding pitfalls in your real estate investment business in Columbus, Ohio. Be honest with yourself and the deal. This goes back to the first point on this blog post where you have to honestly assess whether the property is going to be an asset or a liability. This process should involve extensive market research, a thorough appraisal and inspection, and a title check to ensure you have a clear title. Savvy investors rely on tried-and-tested formulas to confirm that the investment will yield the best possible returns. Additionally, in addition to numbers that you’re going to plug into the financial equations, you’re going to want to look at the time and effort required to be able to manage it. For example, we’ve renovated rentals where tenants have moved out 3 times in one year! The landlord had not “penciled in” that turnover when it came to their analysis and the investment wound up costing them a lot more than they had anticipated. By conducting due diligence, you can minimize the risk of unexpected issues derailing your investment.
Partnering with a Professional Team
Working with a professional team like CMJones Homes can significantly increase your chances of avoiding duds and finding great deals. The local professional buyers at CMJones Homes have a deep understanding of the Columbus, Ohio real estate market and can guide you through the entire investment process. With a full-service in-house team of industry specialists, CMJones Homes can manage every aspect of your investment, from market research to closing.