Hello & Welcome back to #FabulousFriday. 2023 appears to be a great market to invest in residential real estate properties. To be successful in real estate investment, it is important to know your local market. The real estate market moves in cycles due to the desire for economic profit. You will need to find the markets that are in a phase of expansion, with rising appreciation, where affordability is good and capital investment looks favorable.
Here are some quick tips to get you started:
- If you are new to the business of real estate investment, it is crucial that you understand the concept of return on investment. You will need to accurately account for the costs of repairs, including cracked foundations, electrical problems, roofing issues, plumbing costs, HVAC replacement, and necessary cosmetic upgrades.
- One of the best ways to avoid problems when investing in real estate is to understand and evaluate the price of an investment property. Know how much the property costs per square foot and how much rent you can charge if renting out the property.
- Be sure to keep in mind and appeal to expected buyers when planning your renovations. For example, don't reduce bedrooms or bathrooms when rehabilitating your property.
- A common mistake is trying to purchase a property in a first-time home buyer area and then trying to renovate that home into a luxury property. You can't sell for top dollar and you may end up losing money. Instead, fix everything that is broken or damaged and avoid top of the line appliances or expensive decorating.
Or perhaps you are ready to become a landlord and acquire properties to hold. Investing in rental properties can be a great way to secure a fixed monthly income. If you think you can handle the responsibilities of being a landlord, you will definitely enjoy earning the consistent income owning a rental property can provide.
If you buy a rental property at the right time and in the right market, you might even be able to cover your mortgage, maintenance, and repair expenses with your rental income. (Even better, you might even have some profit leftover!)
As a rental property owner, you can decide how active or passive you want this income stream to be. Landlords who prefer not to “landlord” at all can contract out their duties to a property manager. Some rental property owners choose to outsource just the maintenance and repairs, and others might do everything themselves to cut costs and maximize income.
When investing in rental properties, you might also consider something called house "hacking". This means you will occupy one of the rooms in a property and rent the other rooms out. Alternatively, you could buy a multi-unit property and inhabit one of the units. This can help you qualify for a residential loan, even though you plan to earn rental income off of the property.
Regardless of your investment strategies, we are here to help. Our local real estate agents are experts in the Hampton Roads area. Schedule a complimentary market analysis today with one of our knowledge real estate experts. See you next Friday for more tips and tricks. Warmly, Susan