How to Select a San Diego Investment Property

For a potential investor, it may be difficult to know how to choose the right area for real estate purchases. Real estate can be risky if you don't choose the right area, to make a real estate investment. In order to make the proper decision concerning the right area in which to make a real estate investment, you need to conduct some research before you make a decision about any investment property. That means checking the area not just in terms of the way it looks from the outside but the neighborhood in its entirety.

As a potential investor, how do you go about choosing a San Diego investment property that's nearly guaranteed to make you money? First, remember that there are generally two ways to make money on the property you purchased. One is from capital appreciation, where the value of the property increases, and the other is from renting your property out. However, how do you know whether a property is a good investment ? The information below will help you narrow down the field as you select an investment property in San Diego - or anywhere, for that matter.

Location Location

Real estate can be risky if you don't choose the right area when investing in San Diego property . In order to make the proper decision concerning the right area in which to make a real estate investment, you need to conduct some research before you make a decision about any investment property. That means checking the area not just in terms of the way it looks from the outside but the neighborhood in its entirety.

Choose a property in a San Diego location where there is a demand for housing. Researching the market can save you the hassle of a poor choice in real estate investing. You'll also want to make sure the potential property investment will appeal to the masses. Just because you like the uniqueness of a house, doesn't mean someone else will and you may have trouble renting or selling when the time comes.

Even though you may not be living there, you will either sell or rent to people with families. You certainly don't want to buy an investment property that isn't going to make any money for you, so look beyond just the outward appearance of the neighborhood.  The best way is to follow the same process you would if you were buying a home for yourself: research the neighborhood as a whole and see what prices other homes have sold for. You can conduct your own market analysis or hire a professional to do it, but it's essential if you want to choose the right area for a real estate investment.

Other things to look for in the neighborhood include the condition of other homes: are they well-maintained; are the yards tidy; are cars in their proper places; is there a lot of trash or graffiti? Secondly, what surrounds the neighborhood: shopping centers, parks, schools, major thoroughfares with lots of noise? Next, look for signs of potential problems such as kids hanging out on corners, an inordinate amount of trash, abandoned properties or cars?

If you find a number of negatives, this is not the right San Diego neighborhood for your investment property . You want to choose a property in a neighborhood that is nicely kept with people who care about the appearance of their property, whether they own it or rent it. Real estate is one of those assets that should increase in value, but in order for that to happen, it must be in the right neighborhood and kept in nice condition.

The Right Price

Another important factor in choosing a San Diego investment property is the asking price. After your initial down payment, your mortgage payment should be below what you can rent the property out for; you'll find that to be a poor investment. Determining whether or not the property will bring in a positive monthly cash flow for you is one of the most important factors.

If the San Diego investment property you are considering is a fixer-upper, you may want to bring along a contractor to determine renovation costs. Figure these expenses into the cost of the property and, if it will not yield you a return on your money, it may be a very poor investment.

Buying and selling investment properties in San Diego can be a very profitable business. While determining which properties will make good investments , remember: always do your research. Find out the demand for housing in that particular area of San Diego , the rental history on the property, and any other pertinent information you can find. Your research will help you to choose the properties most beneficial to your real estate investing.