Making that first property investment can be intimidating, so here’s a few questions that you may have before you purchase your first real estate investment.
Question #1: Is this still a good market to invest in?
In short, yes. Now is a great time to invest, as a matter of fact, it always is. Now, it is of course of importance that you identify your own personal goals when you invest in real estate, but as somebody looking to generate long-term wealth and passive income, it’s always a good time to score a deal (key words, “a deal”). We can’t predict the future, but we can take a look at our distant past, and luckily with our real estate market we can look back hundreds of years to identify the direction things should continue to move. Being able to look at years and years of market trends shows us that today’s fluctuations won’t necessarily have a long-term impact on our real estate assets. Even when assessing what to invest in based off the entirety of our economic state, we are able to see that real estate is the best hedge against inflation. Trying to beat inflation is vital, as we can recognize in our modern world as inflation continues to break record highs. Our real estate values and rent checks rise alongside inflation, allowing us to cashflow even when inflation is through the roof. I see real estate as your best bet in any economy.
Question #2: Should I only go for turn-key properties?
Turn key real estate is when a property is fully functioning and ready for you to rent out immediately. Investing in a turnkey property is going to be the easiest real estate investment you can make, as you avoid dealing with extensive property rehab, which will give you a huge jumpstart towards cash flow. Rental properties often take ample time and effort between managing renovations and going about your tenant search, so a turn key property helps you accelerate the time between your investment, and your first rent check. Basically, a turn-key property is going to be a good idea0 for investors looking to close a deal, and have an immediately cash flowing, passive investment.
Question #3: Should I consider investing out of state?
Working a deal for your investment properties will not always be as easy as anticipated, especially when you try investing out of state. Despite the hurdles you’ll have to be attentive to, investing out of state can be very lucrative and open up much more opportunity. It really comes down to the difference between landlord-tenant laws from state to state, and your long distant management strategy. Research is beyond important when investing out of state; you’ll have to build an understanding of the laws and regulations regarding property ownership and taxes in your target area, as well as an understanding of the different market you’re investing in. It’s always a good idea to get in touch with other property owners in your target area to better understand the local market and potential challenges you could face. If you live within a market where purchase price, appreciation rates, mortgage expenses, taxes and housing regulations deplete your ROI, don’t let the possible hurdles that may arise from investing out of state scare you off! Do your research, develop a strategy and investing out of state may be the best option for you. Luckily if you’re located in Florida like we are, there isn’t much reason to look elsewhere. Our state has been a long-standing favorite for real estate investors thanks to our world-renowned destinations and investor friendly tax codes.
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