Is Real Estate a Good Investment
Investing in real estate is a great way to make your money work for you. Today’s economy actually supports this proposition in two ways: mortgage interest rates and property prices are low right now, so a purchase won’t cost as much as it might in a couple of years; and the market is recovering all over the country, so your investment should appreciate steadily, starting almost immediately.
There are a number of different ways to get into real estate investments, and there are a number of things to keep in mind when you plunge into this type of investment. Here is some information to get you started.
Weighing the Benefits and Costs
Benefits of owning investment properties include:
While the drawbacks include:
Something many people forget when looking to buy property is that there are more costs involved than just the mortgage and insurance payments. Even if you’re buying a property to resell, you need to calculate how much you can put into any updates or renovations; if you’re looking into rentals, there’s long-term maintenance and upkeep to consider.
Location, Location, Location. San Francisco and New York City have the highest priced homes in the country. Why? As the saying goes: You can’t make more land. Demand is super high in these areas and numerous other locations around the country. Remember, your investment doesn’t have to be in your backyard, or even your state.
Consider taking it easy. If you’re looking for a rental property, you can often purchase one with tenants in place that could include a property manager as well. While this type of real estate may not reap such high returns, you will be getting the hang of owning investment property, which can be tricky for first-timers.
On the flipside. House flippers — yes, like on TV — are still doing well in some markets. Be aware you need to have a lot of cash on hand to make house flipping work for you, and if you can do the bulk of the work yourself, even better.
The benefits of investing in real estate outweigh the costs for many people. If you’re thinking that putting your money into real estate as a long-term growth solution is right for you, contact me to take a look at the numbers and review your financing options. Together we can determine the best ways to maximize your real estate investment returns.
*We are not a tax advisory firm. The information contained in this article is for informational purposes only and may not reflect current tax year rules and regulations. Consult your tax advisor or the IRS for current tax year rules, restrictions and regulations.