It's the dream of many people who live and work in the city. To own or invest in a country property. It could be your own personal hideaway or another type of income property. But there are a few things you should know before you take the plunge.
With the stress and pollution associated with urban life,
many home buyers are turning their attention to the country side. A variety of buyers are moving to rural, mountain or even islands in greater and greater numbers. If you are a real estate investor, this shift from urban to rural living can translate into great investment opportunities.
It’s happening in a number of countries such as the United State, the UK, France, Spain and Hungary, among others. Country properties, farms, ranches, bed and breakfasts, mountain and lake estates are becoming more and more popular with city dwellers looking to get away from the city. These older properties are attracting an aging, but affluent population and creating some great investment opportunities.
Before you decide to invest a few thousand or even million dollars to try to cash in this trend, there are some differences between urban and country investing that you should be aware of.
Careful research is paramount to ensure that you invest in a good location. Some areas are seeing tremendous growth either from retirees or from people with home based businesses. Others are declining in population. Research the population growth of an area and its desirability to potential buyers is very important to ensure that a property that is a great deal today, will still be profitable in a few years.
Finding a good investment property may take longer in the country than in a city. With less inventory available, good properties will sell quickly, particularly in high demand areas. You will need to be able to move quickly when a potentially profitable property comes along.
Rural properties are more difficult to evaluate than urban ones as they are often unique. Ranches, farms, lake homes or island properties may differ significantly from any other one in their area making it more difficult to find comparable properties to determine value. A large cabin on the lake will fetch a different price than a horse ranch a mile away.
Because of the difficulty in finding comparable properties to determine the value of a home, lenders will often make financing a little arduous. You may need to come up with a larger down payment and ensure that your credit is in excellent standing.
Flipping a rural property is possible and can be very profitable but be aware that you may have more difficulty finding qualified and reliable contractors. Prices may run high, particularly for good labour. There may also be delays as good contractors will be few and far between and in high demand.
Selling a rural property is more difficult than in an urban setting. It will take longer to sell a property as it may take longer to reach potential buyers. You will most likely need to advertise your property outside of the immediate community to find a qualified buyer. The Internet will be a great tool to advertise to those looking to relocate or seeking a second property.
When selling your rural property, you will need to look into the different regulations, particularly if your investment is in another country. Taxation may be different also. You may also need to factor in exchange rates and other government considerations.
Despite all the hurdles of rural investment, there is money to be made if you do your homework and evaluate the properties carefully. Good properties in good areas will always be in demand. So start looking, you never know what you might find.
