What does an investor look for before purchasing a home?
What kind of apartments are the most experienced investors looking at? Of course, the answer depends on the preferences of each of them, but considering the real estate market data of recent years, certain trends can be observed. Let’s discover together what an investor looks for before purchasing a home?
1. First of all, an investor carefully chooses the moment of purchase
The right time for an investment is not only chosen based on intuition, but based on market data. Investors know this.
What is the market context? What is the yield? How many livable square meters are on the local market, what is the number of new housing units per thousand inhabitants, what is the salary-apartment price ratio (with how many average salaries do you buy an apartment?) are just some of the questions they have to ask themselves a pre-acquisition investor.
2. An investor chooses an area with many amenities
The main landmark in a big city, such as Bucharest, is a very short distance from a means of public transport (metro, tram). For this type of apartments there will always be a very high demand.
Another important criterion is quick access to the downtown area or another important point of interest, for example an office area, restaurants, hospitals, parks or relaxation areas. Discover the residential complexes in our portfolio and choose the area that suits you.
3. The floor – a major detail
Also, investors are mainly interested in the first 5 floors in the case of blocks with 9-10 floors, excluding from the start the apartments located on the ground floor or the top floor.
The apartments located on the top floor are often recognized for the problems they can encounter – such as those on the level of insulation or that heavy rains can cause various infiltrations, and in summer extreme temperatures can create great discomfort. However, in the case of new construction, some buyers prefer penthouse apartments on the top floors. At the same time, in the top of investors’ preferences are the new apartments located on the ground floor that have terraces and gardens.
4. An investor is looking for apartments with the highest yield
Although it is recommended to own apartments of all types in the portfolio, it is well known that studios or 2 rooms have the highest yield (relative to the purchase price and potential rent). 3-room apartments are more difficult to rent and the difference of one room does not necessarily mean a proportionally larger area.
5. An investor sees the potential of a property
Some investors especially look for renovable apartments, because they are more profitable and have a higher negotiation margin, and renovations can be done easily. Or look for semi-finished apartments that can improve their condition and increase their value quickly and cheaply.
You, as investors, what criteria do you look for when purchasing a home?
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