What Makes a Good Investment Property

What makes a good Investment?

What makes a good investment property can be difficult to answer. In most cases institutional investors will look at the capitalization rate. Although capitalization rate is a great metric for commercial and multifamily, it may not work well for the individual investor who's looking at the long-term investment and or income for retirement. In the Washington area an average of 2% Cap Rate average. This is a reflection of the low risk environment which Washington DC is considered to be. We have the federal government, high-tech industries, like Amazon, Boeing and of course all of the Beltway Bandits.


Because the Washington area has so many well-educated people with strong disposable incomes, you have a very stable Rental Market place making the DC area a desirable place to invest and or live. 


What makes a good investment property is an asset which performs reasonably close to your expectations. Depending on the cash that you invest will determine your return on that investment. We often see investors purchasing with cash, using that rental income as part of their retirement strategy. Although Leverage does improve your chances of building a larger portfolio it will all depend on your capabilities. 


Some of the factors to consider: