It’s never been a better time to buy. Interest rates are at an all-time low and real estate can be a great way to invest. Real estate investments have excellent return potential and will diversify your portfolio.
There are so many ways to invest in real estate, each with varied capital needs, risk levels, and investment dynamics.
Rental Property. Owning one or more rental properties is the most obvious way to get into real estate to diversify your holdings. You have an income stream from the rental proceeds while the asset appreciates over time.
My clients often ask advice on purchasing their first investment property. After all, owning rental properties isn’t for everyone. Before you become a landlord, know thy self. It can be a significant time commitment. That’s where a good property management team comes in handy to help you screen applicants, market the property, and follow local ordinances you may not be aware of.
Financing your first rental property can be very expensive. Most lenders will require at least a 25 percent deposit. And you’ll want to be sure to have 60 days’ worth of expenses in savings as a cushion.
Vacation Rental. If you are looking at real estate in Seacoast NH and Maine, you might consider buying a vacation property. Vacation rentals can be quite a bit easier to finance, especially if the property meets your lender’s definition a second home. Add to that, vacation rentals tend to bring in more money per day than a long-term rental. The drawbacks include promoting and managing the rentals, which generally turn over weekly. Again, a good property management team can alleviate the stress and keep your vacation rental near 100 percent occupancy.
Owner-Occupied Home. Another option, is the good ole owner-occupied investment. That is buying a multi-unit residential property that you live in while renting the other units out. This is a great way to alleviate your own rental costs, while building equity in a more valuable property had you only bought a single-family home. This is a great way to leap frog into the real estate investment market. Let’s say somewhere down the line you find your dream home. Owning the investment property first makes it much easier to finance a new primary residence.
Whatever approach you take to real estate investing, know this, investing in real estate can offer lower risk, greater returns, and diversification. If you are planning for retirement, saving for college, or earning extra income, investing in real estate can help you achieve these goals.
To learn more about how our team can help you make real estate part of your investment portfolio, email REMAX Rising Tide Real Estate Owner Jennifer Madden at firstname.lastname@example.org or visit www.maddenre.com