Choosing the right property is the most crucial step in the real estate investment process. Investing in the right property will set you up for success, and you’ll continually reap the rewards of a steady passive monthly income, tax advantages, diversification, leverage, and consistent property appreciation. However, investing in a below-par property is a sure-fire way to cause yourself financial headaches and increased stress levels.
Ark7 takes property selection into our own hands to ensure that our properties are of the highest standard. Ark7 allows you to enjoy the convenience of selecting from hand-selected properties without the hassle of browsing through hundreds of real estate listings, physically evaluating properties, or conducting strenuous market research.
When purchasing real estate, we prioritize finding properties that have a high investment value, which is determined by the appreciation and the rental income. Our evaluation process includes in-depth research on price, location, capitalization rate, appreciation value, and property condition, and we strive to assess every possible detail of a listing to minimize risk.
Ark7’s current selection of Austin properties:
Ark7’s current selection of Berkeley properties:
Among the most crucial aspects we consider are:
1. The location of the property
Nothing matters more than location when selecting an investment property. A property’s proximity to local amenities, good school districts, public transportation, and frequently used freeways plays a crucial role in determining real estate value. In addition, the reputation of a neighborhood or the history of the specific area can either increase or decrease a property’s attractiveness.
To gauge whether a location is optimal for real estate investment, we find the answers to questions like:
- What is the local rental level and the rent-to-sale ratio?
- What is the historical rate of return of the local real estate?
- Is the purchase price lower than the average market price?
- Based on the local economic growth, will the property appreciate?
- What is the rate in which the property will appreciate in the future?
- Do local policies favor renting/rebuilding?
- Does the location have a high or low crime rate?
- Is it convenient for commuting and living?
- What is the quality of the local school district?
- Are there any frequent natural disasters in the area? If necessary, what is the cost of natural disaster insurance?
- What are the property tax rate changes?
- What are the conditions for eviction?
2. The condition of the property
It is essential to evaluate the condition of a property before purchasing it. A property in poor condition is not only unsuitable for tenants, but it is also not a viable option for real estate investment. Purchasing sub-par real estate would put Ark7 users at financial risk, so we conduct in-depth research to ensure that our purchases are high quality.
To decide whether the quality of a listing fits Ark7’s high standards, we research details like:
- What is the local topography? And, will it negatively impact the foundation in the future?
- What type of house/ property is it?
- What is the age of the property?
- What is the condition of the infrastructure?
- Are the electrical appliances updated and in working order?
- What is the income level of typical tenants?
- Will the property be easy to manage long-term?
- Is there any potential for reconstruction in the future?
Ark7 purchased our first property in the Austin Metro Area earlier this year. The single-family home is located in Pflugerville, TX, just a 25-minute drive from downtown Austin. Before selecting the property, we thoroughly combed the Austin area real estate market. Ultimately, we chose this property because it is a short commute from major employers like Apple, IBM, and Dell, has high appreciation potential and is located near The Domain and many other desirable amenities. Our first Austin, TX, property sold out in under 7 minutes, and investors are already enjoying the benefits of investing at Ark7, which include monthly rental cash distribution flow, hassle-free remote management, and a diversified portfolio.