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1110 Tuscarawas Avenue NW, New Philadelphia, Ohio 44663
Everyone’s heard about real estate investing. Whether it’s Will Rodger’s famous quote, “Real estate is the best investment in the world because it is the only thing they’re not making anymore,” or legendary Manhattan real estate investor Louis Glickman, who said, “The best investment on earth is earth,” people who are building wealth tend to invest in real estate, and with good reason. Real estate has a stellar reputation for building wealth and positive returns, but that doesn’t mean that all investments are equal.
If you’re new to the idea of investing in real estate, here are 5 questions to ask before you jump in. If you’d like to talk to someone in person, feel free to email one of our agents or call 330-364-6648 and we can help find out if investing in real estate is right for you.
Investing in real estate isn’t for everyone. While you don’t need to have been featured in Forbes to buy your first rental property, you do need to have a good grasp on your finances. The days of easy zero-down home loans are over. Real estate isn’t a get rich quick scheme, but a way to let your net worth work for you. If you’re unsure, talk to a financial adviser to see if investing in real estate is a good fit for your overall financial plan.
Real estate investing is a large and complicated field, encompassing small rental houses, large apartment complexes and commercial rentals, not to mention more in-depth investments for agricultural uses, land speculation and mineral rights. First time investors commonly start out by trying to “flip” a home for profit or by buying a single rental property. There are dozens of ways to invest in real estate, but if you’re starting with a small residential property, keep an eye out for these things:
In real estate, location is everything. The last thing you want is to constantly struggle to keep renters in a nice house in a bad location. That doesn’t mean that you should only invest in the fanciest parts of town, but have a good idea of what you’re getting into. Consider driving by a potential investment property at different times of the day to see what everything looks like.
One mistake many first time investors make is to underestimate the expenses associated with investment property. Most people know that homes need repairs sometimes, but fail to realize that those repairs aren’t all leaky faucets and repainting. Occasionally houses need new a new roof or a new heating and cooling system. There are also a whole host of smaller expenses that add up. Things like water/sewer costs, garbage pickup, utilities, legal fees, accounting, evictions, vacancies, office supplies and a whole host of other costs have to be included when you’re making your investment decisions.
Always start with the end in mind. Know what you’re going to do with a property before you buy it. In our area, if you buy a potential rental home by taking out a mortgage, it’s possible that the rental income won’t do much more than pay the mortgage and upkeep expenses, which means that it may not add significantly to your monthly income. Which doesn’t mean that it’s a bad investment. In 30 years you’ll own the property free and clear and it likely cost you nothing out of pocket. At the same time, a run down house, bought for a good price and fixed up can make some quick cash in a flip, but won’t earn you any residual income. Knowing what you’re trying to accomplish before you start is critical in getting where you want to go.
No matter what your goals are, if you’re new to real estate investing, it’s always a good idea to talk to a professional. At McInturf Realty, many of our agents have worked with real estate investors for years and can help you get a good idea of whether or not it’s the right avenue for you. If you need someone to talk to, make the call to 330-364-6648 today!
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1110 Tuscarawas Avenue NW
New Philadelphia, Ohio 44663
Phone: (330) 364-6648
Fax: (330) 364-2355