Important Factors for Real Estate Investing

Important Factors for Real Estate Investing

February 10, 2023, 12:00 am blog-header-image

You’ve probably heard about all the benefits that come with real estate investing. Industry leaders talk about its stability as an investment asset (even with rising interest rates) its consistency in rental income, and the various tax advantages available to them.

After years of planning your finances, you may see now as the right time for you to get yourself a real estate investment. You can enjoy all the similar benefits as long as you identify the right investment property.

The team from Suncastle Property Management has outlined the various factors that you need to consider when investing in real estate.


The value that you derive from your rental property is in part thanks to its location. Its value of it is a function of the amenities and services available in its surrounding. Proximity to basic services, green spaces, and entertainment will play a role in the demand that your property enjoys.

When considering location, it’s recommended that you have a long-term view. Don’t only look at what it offers now but also consider what the neighborhood will look like a few years from now. Look for signs of might development.

If your investment is in the right area your property value will improve over time and you’ll have an easier time marketing your rentals and keeping tenants long-term.

exterior of a yellow property against a blue sky

Property Appraisal

There are few assets that compare with real estate in terms of the initial cost of investment. You might need to secure some funds either from a mortgage company or a lender. They will likely insist on having a licensed property appraisal.

An appraisal is not only important for the issue of lending but the information contained within the report can assist you in feasibility analysis, negotiating the insurance, and also with the taxation of the property.

You should be aware of the three basic appraisal methods for your property:

  • Income approach. This approach is considered the property’s potential for generating income. A good example where the method could be used is for a multi-rental investment.
  • The sales approach. The appraiser will make use of recent sales of comparable properties in the area. The ones chosen must have similar characteristics to your property in terms of condition, age of the development, and location.
  • Cost approach. In the case of unique developments that lack comparable units, the appraiser will use the cost approach. They will in essence separate the land from the development. They will use the sales approach to value the land and use the depreciated replacement cost to value the development.

person in a blue shirt using a pen to look over papers with graphs and pie charts

Investment Goal and Horizon

Different investors seek to invest in real estate for a variety of reasons. Some investors who are starting off are seeking to build up equity. The more experienced investor could be diversifying their portfolio or looking for a good source of passive income.

To achieve any of the above goals, there is an ideal investment type in any market. If you are unclear about why you are investing in real estate, there might be a mismatch between the decided investment asset and your goals. This would be financially dangerous in the long term.

There are several options that you can choose from:

  • Buy and Use. An investor could be looking to save money spent on rent. Provided you invest in a prime location, you could enjoy an appreciation in property value over the years.
  • Lease. Leasing of the most common options among investors. An investor could be looking to enjoy long-term rental income from the property. However, they must also consider the management of the property as it plays a big role in determining the feasibility of the investment.
  • Flipping Property. Depending on the property and market, an investor can make a sizeable profit from this venture.

Revenue Stream

Whether you are purchasing property to lease or seeking to flip houses, you need to look at the numbers. An investor should calculate the expenses, expected cash flow/ income, and most importantly, the return on investment (ROI).

two people using a calculator to assess accounting figures

Any analysis of revenue stream should consider the:

  • Expected revenue from the investment (with consideration for review and inflation)
  • Expected management and maintenance costs
  • Tax advantages
  • Cost-benefit analysis of leasing vs. selling the property


As we mentioned earlier, you might need to secure some funds to be able to invest in real estate. Ensure that you are the financial capacity of handling the mortgage repayments and that you are able to pay off any other loans that you may have at the same time.

When choosing your mortgage, be sure to check on the type of mortgage that you can secure from the lender. Also, read the terms and conditions to understand any extra levies and charges that you might be expected to meet.

Bottom Line

You can now appreciate the technicality that comes with real estate investment. A proper analysis of the local market, spatial considerations, and economic considerations need to be made before you can make that final decision.

You might need to consult a local property professional. Should you be looking to invest in and around the St. Augustine area, the right property consultant to have by your side is Suncastle Property Management. We have years of experience offering sound and professional advice to real estate investors in the region.

We provide full-service management solutions for rental property owners. Our experienced property managers will help you achieve your investment property goals through a wide range of services that include marketing, tenant screening, rent collection, and property maintenance. Give us a call today to learn more!

Next Post Previous Post