Questions to Ask Yourself Before Purchasing an Investment Property

Confiscated Cash, 1965 | Source: State Archives of Florida

If you are looking to diversify your portfolio and generate passive income, we at Kanopy Homes believe that investing in real estate is a great opportunity. Here are some questions to ask yourself before signing the papers for an investment property and why Kanopy checks those boxes. 

Question #1: Is this property a practical purchase? 

When held in your portfolio for multiple years, single-family homes would be considered an extremely practical investment. The home itself can appreciate over time, and the land it sits on will appreciate too. To start making rental income you need renters! Is the layout of the home practical to attract different demographics of prospective renters? A younger demographic prefers an open-concept layout for hosting family or friends and the older demographic prefers a minimal number of stairs. Kanopy Homes kept this in mind when creating our one-level, open-concept floor plans.  

Question #2: Is this property in a desirable location? 

To keep a steady stream of rental income you will be looking for high-quality renters and high-quality renters will be looking for an excellent location. The executives at Kanopy chose their markets with this in mind. Building homes in North Port, Port Charlotte, and Cape Coral gives our homeowners accessibility to highly-ranked school systems and healthcare facilities.  

Question #3: Is this a good fit for my financial strategy? 

By investing in real estate, you are already making a smart decision about your financial future, but picking the right property is key to ensuring long-term success. If you choose to finance, what financing options are available? Is the down payment within budget? What does the payout look like? Kanopy works with many different banks to secure financing for its buyers and offers an extremely practical down payment schedule. It is also crucial to compare the potential rental income to the fixed expenses (property tax, homeowners' insurance) and consider what the variable expenses might look like. 

Question #4: Is this property going to require frequent/extensive maintenance? 

We would consider a property that does not see a lot of turnovers in tenants a “low maintenance” property - our reasoning being the probability that a long-term renter is going to take much better care of a rental that they consider “home” than someone just passing through for days, weeks, or just a few months. Another reason we would consider our homes to be “low maintenance” is the simple fact that they are new-construction homes. You will not have to worry about a 16-year-old water heater being on its last legs or when the last time the roof was replaced was. That said, your choice of property management also plays a huge role in maintaining a healthy home, but we can talk about our management company in another blog... 

We hope that these few questions will help you in making some important yet exciting decisions! If you are interested in working with Kanopy Homes to diversify your investment portfolio, email info@kanopyhomes.com to contact a member of our team!