Buying a home isn’t only for those looking to relocate; in fact, it’s actually for anyone looking for a new adventure and investing opportunities. There are many options available for those who are interested in buying homes for investing purposes. Have you ever wondered how these options could work for you and your family?
Purchase and Rent
One of the easiest and safest real estate investments you can make is to buy a home and rent it out. The thought of being a landlord can be daunting, but investing in a rental property can lead to extra income, growth of your investment and the opportunity to help a tenant find a happy home. The best homes to purchase if you are planning to rent are located in low-crime, highly populated areas with a large pool of potential renters. Ideally, these homes have multiple bedrooms and bathrooms and provide easy access to public transportation, shopping and other community resources. If you are ready to begin your journey to investing in a rental property, give us a call to talk about the next steps.
“Flipping” a home is simple in theory – a commercial or residential property is bought, restored and quickly resold for profit. With a little elbow grease and a strong team at your side, flipping homes can be both a fun and financially rewarding experience. Here are some tips for anyone thinking about this type of investing.
- Choose Your Neighborhood Wisely – You don’t necessarily have to “flip” in the same area where you live, although it is certainly more convenient. Look for areas where home prices are rising, sales are steady and demand is high. If you’re not sure about your area, begin researching other areas and reading up on local economics and trends.
- You’ve Got to Spend to Earn – Remember that real estate investment is just that….an investment. If necessary, work with others to create a money partnership and share in the funding and profits of the project. Working with friends or family as money partners is ideal. Hard money lenders may require 20% or more of the purchase price, plus costs and interest payments. Also, remember that in the world of foreclosures, cash is king.
- Get a Grip – “Fixer Upper” or “As Is” homes vary in the degree to which they will need repair, and it may be difficult to find a deeply discounted property that isn’t in poor shape. Know the limits of what you are willing to deal with before you commit to purchasing a property – some issues may require serious and expensive construction. Know your budget before making any commitments and keep costs down by researching similar projects in your area and using cost-effective labor.
Tips for first-time investing
- Know your Options – Not all investment properties or situations are the same, so it is important to determine what type of property you are interested in. We recommend that first-time real estate investors focus on residential housing, instead of commercial real estate or land development.
- Have a Team – The search for potential properties can be made significantly more efficient with an agent experienced in real estate investing. Give us a call to discuss potential issues that may arise in your role as landlord, or visit your local general district court to sit in on some landlord/tenant cases.
- Bank on it – Discuss your interest in real estate investing with potential lenders or your financial planner to determine whether or not you have the assets to handle your investment.
- It Takes a Village – Partner with local repairmen or contractors in your area for renovation and repair work. Other useful resources may include a property management firm and an accountant for tax-related and investment advice.
Remember, there is always opportunity in the real estate industry for hard workers and risk takers, and there are rewards to be had, personally and financially.
The Waypoint Real Estate Group has years of experience partnering with investors in purchasing property. We would love to hear from you to discuss what investing possibilities may be out there for you.