Investing in real estate has become increasingly popular over the last fifty years and although the real estate market has plenty of opportunities for making big gains, buying and owning real estate is a lot more complicated than investing in stocks and bonds.
The general idea is that you purchase a property and rent it to a tenant while the property appreciates. You can locate a tenant on your own, however for first time or out of area investors, a property management company is highly suggested. The owner, the landlord, is responsible for paying the mortgage, taxes and costs of maintaining the property. Ideally, the landlord charges enough rent to cover all of the aforementioned costs. A landlord may also charge more in order to produce a monthly profit, but the most common strategy is to be patient and only charge enough rent to cover expenses until the mortgage has been paid, at which time the majority of the rent becomes profit.
Currently, in our market, REO and bank owned foreclosures are exceptional values and a good choice for investments. In addition to rentals, properties in need of a little TLC can be purchased, the work completed and "flipped" immediately for profit. As with any investment, there is much potential with real estate, but this does not mean that it is an assured gain. As with any investment, make careful choices and weigh out the costs and benefits of your actions before diving in.
If you would like to discuss investing in real estate with one of our professionals, please contact us and we would be happy to answer your questions and guide you through the process.