• by The VRET Team

How to Choose the Perfect Oklahoma Investment Property in 2023

It may surprise you to learn that homes cost an average of over $350,000 as of 2022. Rising home prices have proven to be a significant investment opportunity for those who wish to purchase real estate. This is particularly true when it comes to buying an Oklahoma investment property.

Not everybody understands everything they need to know about the Oklahoma real estate market before they purchase property, though. Let’s take a closer look so you can make the decision that’s best for you.

Determine What You Want Out of Your Property

The first step to successful real estate investment in Oklahoma is deciding what kind of property you want and what purpose it will serve. Do you plan to rent out the property?

Are you buying it as a fixer-upper or an income-producing rental? Both of these have entirely different strategies that you will have to pursue.

You should also figure out how many properties you want to buy. As you might guess, you will get a higher return if you invest more money into the market. It shouldn’t come as a surprise, though, that buying more homes comes with more responsibility.

The last thing you want to do is end up with properties that you can’t handle. Once you have established your goals, you can begin moving forward.

Research Local Markets

Before you start searching for real estate in Oklahoma, be sure to do a thorough analysis of the local market.

Research the local economic climate and look at factors like population growth, job availability, and local government policies. This will give you a better idea of how the investment property might fit into your financial goals.

It’s also important to look into the major selling points of the location. For instance, does a certain neighborhood have easy highway access? Is it located next to a high-quality school? The better the surrounding environment, the easier it will be to sell/rent your property in the future.

This isn’t to say, though, that it is always a bad idea to purchase a house outside of a wealthy area. Over time, cities often strive to improve lower-income areas. Purchasing a home today in a low-income location could cause the value of the house to increase exponentially as time goes on.

It will also make it easier for you to get involved in the market. Houses in areas like these often cost a fraction of the price of higher-end homes.

Determine Your Investment Strategy

Your investment strategy will serve as the foundation for your financial performance. Will you purchase the house by yourself, or with someone else?

Do you have a plan for financing the purchase? What kind of return on investment do you expect from owning this Oklahoma property?

Financing can come in many different forms, and the most common is a conventional mortgage loan. However, how easy it is for you to obtain financing will depend on a handful of different factors.

Your loan history, credit score, and cash on hand will all play a role. Lenders use this information to determine how reliable you are as a borrower.

You should also do your best to obtain financing that has a manageable interest rate. Even a difference of 0.5% can be substantial when considering the amount of money required to buy a home. The best way to find an interest rate right for you is to browse multiple different lenders.

This is a process that you should take your time with. Many people make the mistake of going with the first lender that they encounter. More often than not, this will put you in a financial situation that is less than ideal.

Consider Your Budget

The most important part of deciding whether or not to invest in real estate in Oklahoma is understanding your budget.

In general, it’s best to not stretch your budget too far in order to make the purchase. Consider all of the costs associated with owning and maintaining a property, such as repairs.

To clarify, let’s assume that your maximum budget allows you to make payments on a $500,000 mortgage. If unexpected costs arise shortly after your purchase, you might not have the money to accommodate them.

This could cause you to face a significant number of obstacles. If you plan on renovating the home, you will need to spend extra money taking care of underlying issues. If you are renting the home to tenants, you will need to pay for repairs as soon as possible to maintain their quality of life.

This is one of the most important responsibilities you have as a property owner. So, always keep this in mind before making a purchase.

Don’t Neglect Your Property Taxes and Insurance Obligations

One of the biggest mistakes people make when investing in Oklahoma real estate is underestimating their property tax and insurance obligations.

Property taxes are determined by the county, so it’s important to research what your expected tax burden will be before making an offer. Likewise, if you’re planning on renting out the property, you’ll need to factor in the cost of liability insurance as well.

You don’t want to be caught off guard by unexpected costs after making the purchase. Depending on certain factors (such as the size of the home), your property tax obligations could prove to be a substantial amount. Check with your local municipality to gain insight into your tax responsibilities.

Not only could you end up dealing with legal issues, but you might end up paying extra money in fines or fees.

Work With a Professional

There are investment professionals out there who specialize in the Oklahoma real estate market.

Working with a professional can help you navigate the process and find the best investment property for your needs. They have the experience and knowledge to guide you through each step of the way and can provide valuable insights into any hidden details regarding a particular property.

They will be one of the most powerful resources that you can leverage. Although some people have the requisite experience to handle real estate on their own, don’t overlook the utility that a professional provides.

What Should I Look For When Searching For a Professional to Work With?

As you might guess, their reputation will play a large role in the results that you get. What do their past clients have to say? Are they knowledgeable about the Oklahoma real estate market?

Do they offer any additional services, such as property management or financing advice? These are all important questions to consider when searching for a professional that will help you find the one best for you.

It’s also important that you understand the red flags to watch out for.

Be wary of anyone who guarantees a certain return on investment or promises to make the process easier than it is.

Try to get a sense of what their fees are going to be. Every professional will charge differently, so it’s important to understand how much you’ll be paying before committing. Finally, make sure that they are licensed and have the appropriate experience to work in the Oklahoma real estate market.

How Do I Minimize Risk?

You can achieve this by discerning all of the risk factors that you may encounter as a property owner. For instance, is the market you’re looking at particularly volatile?

Does the price of the homes you’re looking at reflect their actual value? Are there hazardous conditions on the property? Answering these questions and more can help you avoid potential losses down the line.

Other common risks include tenant rental problems, unexpected repair costs, and issues with the property title. As long as you stay prepared for them, you’ll be able to deal with them if the need arises.

Keep in mind that some risks can be avoided. Natural disasters, for instance, will require you to deal with the aftermath and are entirely out of your control. But, having the right mindset can go a long way.

How Much Should I Have For a Down Payment?

It should be noted that the amount of money you will need for a down payment can vary greatly depending on the type of property you’re buying, your credit score, and your loan history.

Generally speaking, you should aim to have at least 20% of the total purchase price saved up for a down payment in order to get the best interest rates.

Additionally, it’s important to consider the closing costs associated with a real estate purchase. These can add up quickly and should be taken into account when budgeting for a down payment.

If you don’t have 20%, there are still options available. Some loan programs allow buyers to put down as little as 3% or even 0%. Consult with a real estate professional and your financial advisor to determine what the best option is for you.

However, private mortgage insurance will need to be purchased when putting down less than 20%, which can add additional costs.

How Do I Find a Good Property Manager?

The property manager you choose will play a large role in the success of your Oklahoma real estate investment. It’s important to take the time to vet potential property managers, asking questions about their experience, their availability, and their fees.

Additionally, you should check online reviews and talk to other investors in the area for more insight into a particular manager’s work.

Do you feel comfortable communicating with them? Do they have experience working with the kind of property you’re interested in?

By taking the time to do your research, you can ensure that you are getting a reliable and professional service. A good property manager can make all the difference when it comes to a successful real estate investment in Oklahoma.

What Is Turnkey Investing?

Turnkey investing is a form of real estate investing in which the investor purchases a property that is immediately ready for tenants.

This means that all repairs, renovations, and tenant placement have already been done. This type of investment can be ideal for those who do not want to take on the entire process themselves.

Other elements of turnkey investing to consider include the location of the property and how it fits into the investor’s overall portfolio. By assessing these factors, investors can ensure that their turnkey investment is a sound one.

How Is Oklahoma City For Real Estate Investing?

Oklahoma City offers a wide range of real estate opportunities for investors. The city has experienced steady growth, and there are numerous neighborhoods with diverse housing options.

Additionally, the city boasts a strong job market and low taxes, making it an attractive destination for those looking to invest in real estate. It also has a strong rental market, which can be attractive to investors looking to make money through rental income.

This makes Oklahoma City an ideal destination for those who are looking to build their real estate portfolio.

This makes Oklahoma City an ideal destination for those who are looking to build their real estate portfolio. It also offers a great opportunity for those who are just getting started in real estate investing. With its low taxes and diverse housing options, Oklahoma City is an excellent choice for real estate investors.

You Shouldn’t Overlook an Oklahoma Investment Property

Buying an Oklahoma investment property comes with plenty of benefits that can pave the way to financial freedom. The above guide has everything you need to know in order to get started, so be sure to keep this information in mind.

Looking for more information on what we can do? Reach out to us today to see how we can help.