Believe it or not, home prices rose by 16.9% in 2021!
Many investors know that investing in real estate colorado springs co is smart during a time when so many people are purchasing homes or moving to new neighborhoods. Remote work, company moves, and starting families are some of the many reasons why folks of all ages are picking up and starting over.
Yet you won’t want to invest unwisely. It’s important to know what you’re getting into before you make an important financial move that will impact your future.
Here are some real estate investing tips you’ve got to know about.
1. Find Booming Neighborhoods
Today’s real estate trends see a lot of families and individuals moving from larger metropolises to mid-sized cities. Folks are looking for the transportation, entertainment, and walkability of an urban neighborhood. Yet they prefer a cleaner, less crowded feel.
For example, Vermont, South Carolina, and Tennessee were some of the top ten states people moved to during 2021. A low cost of living and high quality of life are promised. Businesses are flocking to these areas, but you can also find fantastic music and beautiful parks.
Take a look at the companies that are moving to the neighborhoods. Are they well-established and likely to attract a number of new employees to the area? You’ll also want to check out things like crime reports and school districts.
Consider the type of tenant you’re hoping to attract and how they’ll be able to get to work every day. Are there nearby highways or public transportation? Will they be able to go grocery shopping and take their kids to the neighborhood park with ease?
If you’re close to restaurants, sporting venues, and gyms, your building could be a hot spot for young professionals and retirees. You should be offering your renters a convenient lifestyle at a price they can afford. These properties in Memphis are a good example.
2. Check Out Vacancy Rates
You’ll want to take a look a the number of vacancies that are common in the neighborhood you’re considering. Too many empty units could force you to lower rents or to consider less-than-ideal tenants. Make sure you do your research before choosing a rental investment.
3. Consider Taxes and Average Rents
You’ll also need to consider average rents in the neighborhood before you purchase. You may, for example, be looking at a single-family home in an area with a good school district. Keep in mind that you’ll probably be attracting folks who are considering moving to the neighborhood permanently.
Think about what you’ll be paying each month in mortgage and taxes. Will your renters be paying for their own heat, hot water, and electricity, or will you include this in the rental price?
It’s important that you make a profit once you’ve received your monthly rent check and paid the bills. If you don’t think you can charge the necessary amount of rent in the neighborhood you’re considering, it may be time to move on. You won’t want to be cutting it close with your first investment.
4. Think About Turnkey
Turnkey properties are solid investments for those investing in a different city than the one they live in. These require minimal repairs and renovations. If you aren’t handy or won’t be in the neighborhood often, you can enjoy a passive income without having to pour money in later on.
Loans on turnkey properties often have better terms. You may even be able to get them for a lower downpayment. Many first-time investors find that turnkey properties were a great way to break into the market.
5. Diversify
Once you’ve got your feet wet in the real estate industry, you’ll want to keep a diverse portfolio. While many markets are booming now, some can fluctuate depending on trendy neighborhoods.
If you’ve got properties in different cities, you can protect yourself against market volatility. You’ll also increase your chances of long-term returns.
6. Pay a Visit
Maybe you live in New York and you’re looking to investing a hot Tennessee market. You’re considering a turnkey property and you’re confident you won’t need to do much maintenance on your own.
It’s still important to take a look at a property in person before you invest. The pictures may be flawless, but you can’t get a great idea of the neighborhood, including its safety and feel unless you pay an in-person visit.
7. Set Money Aside For a Rainy Day
Even the finest properties may have times when vacancies occur. You may also have unforeseen repair expenses.
Investing in real estate is a wonderful opportunity, but you’ll always want to be prepared for anything.
8. Consider Your Ideal Renter
If you’re investing in single-family homes, you’ll probably be looking for a quiet family of professionals. Buildings with one or two-bedroom apartments may be better suited to singles or retirees.
Great renters will be able to verify their employment status. They will have a strong record of financial responsibility, a clean eviction history, and good credit.
Excellent tenants are able to take care of their homes as if they owned them. If possible, talk to previous landlords about how they maintained their previous property.
Real Estate Investing Tips
Great investing strategies will result in a healthy passive income for the rest of your life. It’s important, however, to do your research first. With the right approach and some good real estate investing tips, you could be on your way to a great income in no time.
Don’t stop getting smart about your real estate now. For more great advice, read our blog today.
