While real estate has ups and downs, it has generally been a good long-term investment. Owning a home is one way of investing, but to really take advantage, you can buy property that you won’t necessarily occupy but will make you some money.
There are two basic ways. You can rent out your property, or you can sell it for more than you paid. The latter usually involves improving the property and then “flipping” it.
Before you start making offers on potential rental or flippable property, think about what you hope to accomplish. Are you going to be a landlord or a flipper? The two require different attitudes and skills. While it’s certainly possible to combine the two – to buy a building to fix up and rent, or to rent something you will eventually sell – most people focus on one or the other.
In either case, it’s wise to start small. You may aspire to own an entire apartment complex and rent to a building full of tenants, but it’s better to start out with a single unit and learn to meet the challenges of being a landlord. One hands-on way is to buy a duplex, live in one half and rent the other. If you’re a flipper, you might want to eventually manage a renovation team restoring houses all over town, but you’re better off to cut your teeth on just one.
If you’re a novice, you’ll want to buy locally, and you’ll need to understand real estate trends in your community. Which neighborhoods are changing for better or for worse? How are prices moving? Does the market favor buyers or sellers? Remember, locals trends can be different from national ones. What percentage of available rentals markets are occupied? If occupation rates are high, it’s easier to find and keep tenants.
You can scour local listings yourself, but you’ll do well to consult a real estate agent who understands the market and local rentals. It’s best to work with a banker and have financing in place before you start.
Be realistic about projecting your revenue and expenses. Renovations often cost more than you’d predict. Rental upkeep can be expensive. Eventually you’ll need to upgrade appliances and replace the roof.
If you’re going to be a landlord, decide how hands-on you can be. Can you make repairs yourself? Are you willing to locate tenants and deal with them on an ongoing basis? If not, hire a property management company to take care of day-to-day management.
You don’t have to buy a property and take on the associated headaches to profit from real estate. A vehicle such as real estate investment trust (REIT) or crowdfunded real estate makes you a part-owner of a large real estate investment. Someone else selects and manages the properties. It’s similar to buying stock. You (and others) provide the money, accept the risk and potentially enjoy the profits.
Meet Norma, a trusted realtor in Middle Tennessee. With over 20 years of experience living in Smyrna with her husband and two children, she has a deep understanding of the local community. Norma's background in customer service and the medical field has given her the skills to provide excellent care and service to her clients, no matter the price point of their home.
With a passion for service and a commitment to professionalism, Norma strives to make each client's experience smooth and memorable. As a real estate agent, her first priority is education, as she listens to her clients' needs and wants and uses her skills and 10+ years of experience to deliver a stress-free and enjoyable home buying or selling experience.
Norma is dedicated to making a life-changing difference in her clients' lives and is committed to providing the highest level of service. Let Norma help you navigate the exciting journey of buying or selling your home.
