Evaluation of Real Estate Properties

Liquidity
Investors should know is the property can be converted into cash easily. On the other words, can the property be sold easily? Investors can observe the shops around the area to determine the demand around the area. If the shops can be rented out easily, the demand at the area is still high.

Potential Appreciation
The golden rule is the location. Investors should be able to evaluate the potential of the area in the future. For example, consider :
Are more people moving to the area?
Are there new development around?
Is there a shortage of land to build new homes?


1% rule
If the monthly rental is 0.7 to 1.0% of the purchase price, the property is worth buying.

One of the purpose of renting your property is to use the rent to pay the monthly mortgage payment.
Investors should clear the mortgage payment of the first property before buying the second.
It should be easier to purchase a second property as investors have the rent of the first property and the second property to cover the second property's monthly mortgage payment.

Investors should be alert about natural disasters at the area. If flood always occur at the area, you would not like to have a property there.