With market fluctuations and a changing economy, investing in real estate can prove to be a profitable insurance policy for your financial future. If you are considering making your first investment, here are some things to consider.

Property investors have been riding a wild wave during the pandemic, with the short-term rental market stalling and then restarting, and property prices in many second home markets soared. What future for new buyers of second homes and for managers of more robust real estate portfolios? We’ll explore that and more throughout May at Inman.

Do you receive our weekly Teams Beat newsletter? For the latest team news, information and trends, subscribe here.

An investment property is a great way to generate passive income and diversify your financial portfolio. Real estate investing can prove to be a lucrative business for those looking to make a name for themselves in the industry and secure a healthy financial future.

When choosing your first investment property, it is important to keep several factors and qualifiers in mind. Here are some tips for investing wisely. Also, be sure to consult your financial professional for expert, personalized financial advice.

1. Make sure you can afford it

The most important part of a real estate investment is making sure you can afford it. You want long-term debt locked in for as long as possible so you don’t have to sell due to market fluctuations.

Ensuring that your financial situation is sound enough to embark on investments is the first step to take when looking for an investment property.

2. Take advantage of low loan rates

There are currently very low loan rates that are available. You can take advantage of this, borrow at a low rate and then buy a property that is in high rental demand.

3. Start small

Starting your investment portfolio with a small single-family home or duplex is a great start. Finding smaller properties in areas where prices are more affordable can be a great way to establish a solid foundation for your future investment.

4. Location, location, location

We cannot stress enough the importance of a property’s location, especially when it comes to investing. A long-term investment means you want to buy a well-located property in a growing neighborhood.

The walkability and amenities of the area are crucial, but also ensure that the home is not located directly next to a noisy street or highway.

5. Keep it low maintenance

Find a property that requires little work and is easy to maintain. Ensuring that the structure of the house is sound and the interiors are up to date saves you from having to worry about spending a lot of money on renovations at the start of your investment.

Overall, choosing the right investment property is an important decision, and many factors play into ensuring a successful investment. Taking advantage of low borrowing rates, choosing the right location, starting small, and making sure you can afford your investment is extremely important.

With market fluctuations and a changing economy, investing in real estate can prove to be a profitable insurance policy for your financial future.

David Parnes is director of The agency in Los Angeles. Connect with him on instagram. James Harris is director of The agency in Los Angeles. Connect with him on instagram.