Investing in real estate can be lucrative. To be upfront, it’s not for everyone. You need to be OK with accepting some degree of risk. As anyone who experienced a real estate bubble will tell you, the market can change and sometimes rather quickly. What they will also tell you is that if you’re willing and able to wait it out, real estate almost always bounces back.
There are many ways you can invest in real estate. Here are a few of the most common:
- RENTALS
- It’s not often that conditions are ideal for both buying and selling. If you’re moving and looking to buy a new home, it may not be the best time to sell your current house. Holding onto your house and renting it out can: help you increase your equity in your house, give time for your house to increase in value, give you time to sell in a more favorable market.
- In a hot rental market, you’ll not only be able to cover your mortgage, insurance, etc. but you may even create positive cash flow as well.
- Having more equity in your home can open options for you to get a home equity line of credit, which might enable you to take on future projects or expenses.
- Be aware of tenant / landlord rules and regulations and think seriously about whether you want to deal with tenants. Not all of them are easy to deal with. You’ll want to have a great lease contract before allowing a renter to lease your property.
- If you invest in multiple rental properties, you can also hire a property manager to take care of the tenants, scheduling maintenance and repairs on the houses, etc.
- FLIPS
- To maximize your potential return on investment, you have to find “the worst looking house in the best neighborhood”. What this means is finding that right combination of a “fixer upper” that isn’t a money pit and is in a fantastic neighborhood, so it has potential for high resale value. This is a hard combination to find.
- Once you’ve found a fixer upper, you’ll need a general contractor and/or architect and a vision for how to improve the home. There are some main attributes of a house that will provide instant value — a beautiful kitchen w/ appliances, hardwood floors, a beautiful master bedroom and en suite. The cleaning, demolition, and renovation period can take a long time and will need some supervision. All the while, you’ll have to carry the mortgage and insurance on the house.
- Keep in mind that sometimes you uncover more than you bargain for with a fixer upper and renovations could completely blow your margin of profit.
- NEW CONSTRUCTION
- If you don’t want to deal with the unknowns of a fixer upper, it’s better to start from scratch with new construction. In this case, you want to look for a great location with lots of potential and you want to build the best house on the block! If the property already has a house on it, that can be good since it means the land has been prepared for construction and permitting won’t be an issue.
- In new construction with us, you can be as involved or not involved as you like in the design process. We partner with different builders to create the best house fitting to the neighborhood. We supervise everything from permitting to demolition of the house to constructing the new house and to the final sale of the house!
- It does take longer to construct a new home. Depending on the size of the home and the season, it can take as short as 6 months to as long as a year.
- If you have the money and the time to invest, this can be easiest option for investing in real estate since you don’t have to be involved on a day-to-day basis if you don’t want to be. Working with our team, you’ll have the assurance that a quality, beautiful home will be built and sold at a profit to you!