In terms of investment, nothing delivers like real estate.
For the past two decades real estate investment returns have held steady at 10%. With this kind of reliability it comes as no surprise that more and more people are looking to invest. Accordingly, Forbes Magazine explains the enduring viability of the trend. “Real estate is secured by a physical asset and is an overwhelmingly stable investment. In the vast majority of cases, an investment property will retain its value and appreciate over time. If you make your monthly mortgage payments and have the correct insurance, it is very unlikely that you will experience a total loss on a real estate investment.”
We have compiled a list of what to do and what to avoid for those looking to break into this market.
Build Returns, Not Dream Homes
Purchase a home based on rental income and potential profit. Firstly, your investment home is not your residence. Secondly, make choices based on sellability. Low taxes, good public transportation and new construction are all great selling points
Purchase your investment property in familiar markets. Proximity will give you the advantage of knowledge and close range for problem solving. Buying local is usually a good safe bet or baby step for new investors. However, based on your location, there could be drawbacks to buying close to home. According to Gary Beasley, chief executive of Roofstock in Oakland, “Historically, 70 percent of people buy an investment property within an hour of their home because it’s convenient and they know the area. That’s fine if you live in a market with good rental demand, and there’s no danger of a recession. But it makes more sense to diversify with an investment in another market, just in case job growth declines and rental demand drops at some point.”
Know Your Rights
As a landlord, understanding your legal rights and those of your tenant are essential for long term success. Though these rights vary from state to state and city to city they are easily researched. Preparing for the worst is your best bet towards making the most of your investment.
Finally, if you have any questions about investing in real estate check out our website and contact us today.