Real Estate Investing

Top 5 How To Tips

So, you want to get started in real estate investing? Join the masses! Real estate investing could be the hottest and safest investment in our current economic environment. Savings account interest rates don’t produce the value they once did. The stock market can be unpredictable. Crypto isn’t proven yet. Real estate values have appreciated at an astounding rate over the course of the last couple of years. So much so that the Federal Reserve has had to raise interest significantly to help slow the appreciation and related inflation rates.

Real estate has had it’s ups and downs of course. Everyone has flashbacks of 2008 and wants to know when the bubble is going to pop again. The problem is, there is no predictable “again” because the balloon loans are illegal and out of the picture. That’s what largely caused the previous bubble to burst. If the real estate market does correct itself or depreciate it will be for a different reason.

If real estate is what you’ve decided to shift some or all of your investing into then here is your Real Estate Investing How To.

Real Estate Use

You need to decide which type of real estate you want to invest in. Here are a few choices;

• Long Term Rental
• Short Term Rental – Vacation Rental, AirBnB, VRBO
• Multi-Family
• Commercial
• Land Undeveloped
• Land to Prepare to Develop
• Lot Prepared to Reserve

Investment Property Location

Next you need to decide location. There are so many options here. Here are a few strategies that work.

1. Choose a property close for the most control. You will be able to as hands on as you want. You will be able to deploy legal proceedings if needed. This situation is ideal especially if this is a new investment type for you.
2. Choose a property where you want to visit. Vacation rentals are ideal for this. You can work in your on site inspections and vendor reviews at the same time you want to visit. This leverages your vacation time into investment time.
3. Choose a property for children that need a rental. Buying a single condo or townhouse that can be rented out by your young adult is a great way to utilize an investment property. You can decide later if you want to allow your child to benefit from the proceeds of a sale to help them leverage into a larger single family home. The entry price point for first time home buyers is becoming almost impossible. This is a strategy that will benefit you and them in the future.

Move In Investment

How much budget do you want to invest for the initial purchase to rent phase? If you buy a property that is distressed there will be clean up and repair needed. In exchange you will be able to get it at a lower purchase price. Higher purchase prices will provide a turn key property that you will have to invest a small amount in to get it rent ready.

Turn Over Rate

If you’re looking for a long term rental property you will need to run an analysis on the turn-over rate in the areas you are interested in. It’s a good area if renters stay for a year or more on average. If the turn-over rate is higher that will require more management time and budget. In addition, areas with a high turn-over rate typically mean the neighborhood is not very desirable. There may be higher crime then what you want to deal with for the lower purchase price. If you’re unfamiliar with an area that you see a rental in be sure to do a thorough investigation of crime rate and turn-over rate.

1031 Exchange

If you already have an investment property you want to exchange for something different or better you can do a 1031 Exchange to help defer taxes. Our team has 1031 experts that can help you plan ahead to leverage your investment into your long term goals while taking full legal advantage of the tax laws.

Ready to start investing in real estate? Call our team to help you get started. We love helping our clients on the road to building them more wealth!