Features of a “Great” Chicago Investment Property
Whether you’re new to the world of real estate and looking for your first Chicago investment property or are a seasoned veteran looking for your tenth, finding the right property is critical to making a profit. No two properties are alike. For instance, you can have two identical houses in two different locations. Even though they are identical, they will have different values and potential for profit simply based on location. The same goes for two neighboring properties. In terms of financial investment, no two real estate ventures will ever be alike.
That’s why it takes a lot of hard work and thorough research to identify great real estate property investments. But, what exactly makes for a great investment property? Well, it depends on which type of property you’re looking to invest in.
Let’s take a closer look at some of the key features that make for “great” investments by examining three different property types: Single Family Homes, Multi-Unit Buildings and Investment Condominiums.
Single Family Homes
A single-family home is a freestanding property that usually hosts one family. An average single family home may have three bedrooms and three bathrooms and features a kitchen that is designed to be used by a family. Typically, there is a much wider selection in terms of inventory with single-family homes. They can also be less expensive to buy and therefore may be a smart way to start for first time investors who don’t want to juggle multiple renters at one time.
Some key features that investors should look for and what potential tennants will be looking for in a single-family home include:
- Curb appeal
- A safe, clean neighborhood
- An entryway
- High ceilings
- A modern floor plan (i.e. open concept, ensuite master bath, walk-in closet in master bedroom, separate laundry room, garage space, eat-in kitchen, walk-in pantry)
- A front yard and a back yard
- A good-sized kitchen with modern fixtures and appliances
- Plenty of closet and storage space
If you’re looking to expand your real estate investment interests or simply want to start out with more potential income streams with less overhead, a multi-unit property may be the way to go. One of the greatest features about multi-unit investments is that you can acquire several income-producing units at one time. In doing so, it will take far less time and energy to acquire these units than if you were to continue purchasing single-family homes down the road.
Multi-unit properties usually cost less per unit to purchase and own. What’s more is that certain amenities can add more value to all of the units rather than just one. For example, you can add a pool, install a new roof or update HVAC systems so that all units can benefit. In return, these updates or improvements may even allow you to charge more for rent or the sale of the property.
Some key features that you, as the investor, need to consider when looking for a multi-unit investment property include:
- Location – The highest demand for rental units is for those located in busy areas, within walking distance of shops, restaurants and large employers.
- Neighborhood – Find out what types of rental properties are popular in the area you plan to buy.
- Size – Space and size will influence potential rental income and your ability to find qualified tenants quickly.
Generally, condominiums are offered at a lower price point than the average single-family property. Of course, there are some exceptions, depending on the market. But, overall, they are lower in price and therefore easier to sell when the time comes.
With investment condominiums, it’s all about your target market. Typically, you’ll find that this is made up of either first-time buyers who aren’t yet ready for a home or older buyers who want to downsize. Either way, the key selling point is the same – they want the convenience of low maintenance and the benefit of community amenities.
For investors, it’s all about understanding your target market’s needs. Potential condominium tenants (of any age) are looking for certain features that come with the property. These include:
- Common areas and amenities
- Plenty of tenant and guest parking
- Around the clock security
- Social opportunities and events
- Square footage and floor plans that maximize the use of space
- Upgraded appliances
- Plenty of storage space
- Unit upgrades and various bedroom/bathroom combinations (or packages) to choose from
When investing in a real estate property, remember that your goal is to get the most bang for your buck. There are many characteristics of great, profitable rental properties. It’s all about doing your research and preparing on the front end, then deciding which property type best serves your interest and level of commitment.
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