You’ve probably heard about all the benefits that come with real estate investing. Industry leaders talk about its stability as an investment asset (even with rising interest rates) its consistency in rental income, and the various tax advantages available to them.
After years of planning your finances, you may see now as the right time for you to get yourself a real estate investment. You can enjoy all the similar benefits as long as you identify the right investment property.
The team from Suncastle Property Management has outlined the various factors that you need to consider when investing in real estate.
The value that you derive from your rental property is in part thanks to its location. Its value of it is a function of the amenities and services available in its surrounding. Proximity to basic services, green spaces, and entertainment will play a role in the demand that your property enjoys.
When considering location, it’s recommended that you have a long-term view. Don’t only look at what it offers now but also consider what the neighborhood will look like a few years from now. Look for signs of might development.
If your investment is in the right area your property value will improve over time and you’ll have an easier time marketing your rentals and keeping tenants long-term.
There are few assets that compare with real estate in terms of the initial cost of investment. You might need to secure some funds either from a mortgage company or a lender. They will likely insist on having a licensed property appraisal.
An appraisal is not only important for the issue of lending but the information contained within the report can assist you in feasibility analysis, negotiating the insurance, and also with the taxation of the property.
You should be aware of the three basic appraisal methods for your property:
Different investors seek to invest in real estate for a variety of reasons. Some investors who are starting off are seeking to build up equity. The more experienced investor could be diversifying their portfolio or looking for a good source of passive income.
To achieve any of the above goals, there is an ideal investment type in any market. If you are unclear about why you are investing in real estate, there might be a mismatch between the decided investment asset and your goals. This would be financially dangerous in the long term.
There are several options that you can choose from:
Whether you are purchasing property to lease or seeking to flip houses, you need to look at the numbers. An investor should calculate the expenses, expected cash flow/ income, and most importantly, the return on investment (ROI).
Any analysis of revenue stream should consider the:
As we mentioned earlier, you might need to secure some funds to be able to invest in real estate. Ensure that you are the financial capacity of handling the mortgage repayments and that you are able to pay off any other loans that you may have at the same time.
When choosing your mortgage, be sure to check on the type of mortgage that you can secure from the lender. Also, read the terms and conditions to understand any extra levies and charges that you might be expected to meet.
You can now appreciate the technicality that comes with real estate investment. A proper analysis of the local market, spatial considerations, and economic considerations need to be made before you can make that final decision.
You might need to consult a local property professional. Should you be looking to invest in and around the St. Augustine area, the right property consultant to have by your side is Suncastle Property Management. We have years of experience offering sound and professional advice to real estate investors in the region.
We provide full-service management solutions for rental property owners. Our experienced property managers will help you achieve your investment property goals through a wide range of services that include marketing, tenant screening, rent collection, and property maintenance. Give us a call today to learn more!