Real Estate investing can be a great way to put your money to work and turn a profit. Before getting started though, it is important to understand what is involved, so that the profit you make is enough to cover the risk involved with the initial purchase, the taxes paid, and costs of renovations and utilities on your new property.
Finding a healthy market to invest in is key. While it is possible to turn a profit on a property in a weak market, the odds will be against you this way. By investing in real estate that is already within a thriving market, you will be setting yourself up for success. A desirable market for investment will have low interest rates, good GDP growth, and a relatively low unemployment rate, ensuring that residents will want to continue to live in the area.
Once you’ve found a location, it is important to decide if you want to buy and hold the property for a long term investment while finding tenants for a rental, or if you’d rather buy and flip the property, making improvements and getting a more immediate return on your investment. A long term buy and hold is better for those with more capital and limited opportunities, while buying and flipping could be the smarter strategy for those who have limited capital but a good knowledge of the market and an eye for up-and-coming locations.
Regardless of what kind of residential real estate investing you’re considering, having someone to help answer your questions and find the best properties for your budget is crucial. An experienced realtor can take your investment opportunity to the next level. If you’re considering investing in residential real estate, get in touch today to get started!