Real estate provides a great hedge against inflation and many real estate investments can serve as part of one’s asset allocation and a profitable element within a diversified portfolio. Although, there are many real estate success stories, as with any investment, there are associated risks; but, with careful planning and prudent decision making, real estate ventures can serve as great investment vehicles to increasing one’s net worth over time.
Whether you are interested in undertaking the renovation/restoration and resell of a Fixer Upper (as a “Quick Flip” or the less risky, longer term “Slow Flip”) or purchasing a Rental Property, to minimize risks and increase the odds of being successful in a real estate venture, it would be advantages and prudent to work with people experienced and knowledgeable with this niche industry.
As a seasoned broker/realtor and the owner/property manager of a number of investment rental properties, I have extensive personal experience and have been privileged to help many investor clients succeed in achieving their real estate goals. I am always happy to assist in further detailing seasoned investors or advising first time investors as to:
INVESTMENT STRATEGIES: Investment strategies can incorporate the renovation/restoration and resell of properties, purchasing apartment buildings and other commercial real estate, purchasing land to be developed, or the less risky venture in becoming a landlord.
INVESTMENT FINANCING: Obtaining a loan for investment properties is relatively more difficult than for primary residence or second homes. With the greater risks associated to investment properties, lenders generally have more strict guidelines, charge higher interest rates, and expect more upfront funding/money down.
DETERMINING THE “RIGHT” LOCATIONS: An essential element to succeeding in your chosen real estate investment strategy is locating properties in areas that will have “more to offer” that you can purchase at the “right” price. For rental properties, homes in highly populated, safe neighborhoods (preferably within a good school district) commanding higher rents and lower vacancy rates are certainly more ideal. The quality of the neighborhood will also obviously influence the type of tenants you attract and how often you face vacancies (e.g. locations near universities will primarily attract students who will present a high likelihood of vacating during the summers). Simply stated, the more your property has to offer, the more likely you are to appeal to a greater pool of potential buyers or renters.
EVALUATING POTENTIAL INVESTMENT PROPERTIES:
- REHAB / RESELL- Evaluating an investment property and calculating your offer for a quick or slow flip requires careful consideration of purchase closing costs, repair/rehab costs, holding expenses/carrying costs (property taxes, insurance, utilities, HOA fees, maintenance, etc), selling closing costs.
- RENTALS- A rental investment property pays back in several ways including, rental cash flow income, principal accrual, depreciation of the asset within the recovery period, tax deduction benefits, and in the long term, commonly an appreciation in value. We provide Rental Analysis, Property Proforma (estimated total rate of return in the year of purchase), capitalization rate (cap rate), cash-on-cash yield, etc, for an in-depth evaluation of potential returns.
REPUTABLE, LICENSED CONTRACTORS: To save money in the long run, it’s preferable and prudent to retain recommended licensed, bonded, and insured contractors who have successfully completed similar projects.
PROPERTY MANAGEMENT: The investing range for actively managed properties can be more limited but, with the many responsibilities of self management comes the benefits of higher returns.
Please let us know if you have any specific questions. It will be our pleasure to assist in achieving your real estate investment goals. Contact Us at 512-914-8775 or JilaNelson@gmail.com for a Complimentary No-Obligation Consultation.
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