It is easy to compare apples to apples when you are dealing with fixed items, such as, well… apples! However, it is a bit harder when there are a ton of variables. Comparing two real estate deals, for example, isn’t an easy thing to do. It isn’t even easy to tell if one investment on its own makes sense if you aren’t experienced with the process of real estate investment analysis. The first thing to understand is that it is a critical step when investing in real estate and should be handled by experienced professionals.
It is not uncommon for beginner investors to look solely at the asking price of a property. You might only want to know that its fair market value is near the listed price. However, it might surprise you to learn that a property can be quite overpriced and still be a good deal. You have to look at a full real estate investment analysis to know for sure, not just look at the asking price. You might find out that the property isn’t as overpriced as you thought.
Real estate investment analysis looks at a variety of factors, including prevailing rental rates, vacancy rates for the area and that type of rental property, the condition of the property, upcoming major renovations or repairs that are needed, management costs, quality of the tenant(s), the lease agreements that would carry forward, potential for upgrading property and increasing rents, and more.
If you would like to know more about real estate investment analysis or any of the services that we offer at TriStone Group, don’t hesitate to reach out to us. Your success is our first priority, and we’ll guide you toward that with dedication as your partner.