Real estate can be a tremendous investment opportunity. And for those who are in for the long run, rental properties really can’t be beat. But when it comes to taking that crucial first step, most people aren’t sure where to start. If you are thinking about investing in real estate, here are 10 considerations to help you to get off to a great start.
1.Get Your Finances In Order
Before you take the plunge, take stock of your financial situation. Is there anything that you can do to put yourself in a stronger position to invest? Things such as paying down or consolidating debt, along with working on improving your credit score, can help you to qualify for a better loan. You’ll also want to save up for a down payment. A larger down payment is ideal for reducing your monthly payments, your insurance and even your risk.
2. Do Your Research
Next, you’ll want to learn as much as you can about real estate investing and rental property management. Brush up on the basics of landlording, and get some good books that offer sound investment advice. There is a lot more involved with becoming a landlord than meets the eye, and being prepared will help you sidestep many common pitfalls along the way.
3. Start Small
While you may feel pressured into “going big” when it comes to your first investment, there’s nothing wrong with starting small. In fact, it’s how many successful investors get started. Starting small offers a number of benefits; namely, it’ll give you a chance to gain an understanding of how investing works before there’s a lot more at stake.
4. Know The Numbers
Before you commit to a property, it’s important to know exactly what type of returns you’re looking for. Start by establishing your investing criteria, and resolve to only invest in properties that meet your standards. So be sure to have an idea about cap rate and cash-on-cash returns, along with net yield and cash flow.
5. Scout Out A Location
As a new or first-time investor, you might be looking at property that’s close to home. However, be careful that you’re not limiting yourself. When you open yourself to the possibility of an investment property outside your local area, you’ll be able to take advantage of up-and-coming markets that may have better opportunities. With the property management options and resources available today, investing in out-of-town property is easier than ever.
6.Adopt A Business-Owner Mindset
Investing is a business, and you should treat it like one. Just as you’d have a solid business plan in place for a company, along with clear and actionable plans, key milestones and systems, you’ll want to do the same for your investments. Remember: Your goal is to generate a profit, so make sure you lay the groundwork necessary to do so. Don’t simply invest in the first property that catches your eye. Just as you would in a business, make sure every opportunity checks out. __Full Article Forbes
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Sales of existing homes skyrocketed a whopping 11.8 percent in February compared with January, according to the National Association of Realtors. That is the largest monthly jump ever, with the exception of a change in mortgage policy in 2015 that temporarily skewed the data.
Realtors pointed squarely to dropping mortgage rates and home prices for the increase in demand.
“Consumers are very sensitive to mortgage rates, at least that’s what we are finding out. So as mortgage rate began to drop, there was evidently a strong pent-up demand,” said Lawrence Yun, chief economist for the Realtors.
At the start of last year, housing demand was robust and rates relatively low, with the average rate on the popular 30-year fixed right around 4 percent, according to Mortgage News Daily. That caused a frenzy in buying through the spring. But with supply remaining tight, prices overheated.
By summer, those prices were moving out of reach, especially as interest rates began rising. By November, the average rate on the 30-year fixed had spiked over 5 percent, and home sales plummeted.
Mortgage rates then began falling in December and moved decidedly lower in January to around 4.5 percent, causing the renewed interest in buyer demand. More consumers now believe it is a good time to buy a home and more believe the economy is improving, according to a sentiment survey by the Realtors in the first quarter of this year.
Sales of existing homes skyrocketed a whopping 11.8 percent in February compared with January, according to the National Association of Realtors.
That is the largest monthly jump ever, with the exception of a change in mortgage policy in 2015 that artificially pushed one month’s sales into the next month.
Home prices have been moderating for months and were up just 3.2 percent in February, the smallest annual gain in a few year.
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Created by the Tax Cuts and Jobs Act, opportunity zones are new territory for real estate investors. Peter Muoio, executive vice president and chief economist at Ten-X Commercial, an online transaction platform for commercial real estate, says opportunity zones are on track to be the hottest trend in commercial real estate for 2019. “With valuations at cycle highs and fundamentals waning, the tax incentivesoffered by these programs are massively attractive, especially as not all of these zones are created equal,” Muoio says, acknowledging numerous cities may prove to be diamonds in the rough. As capital flows in, certain submarkets could see increased volume, and “increased liquidity is a positive for the commercial real estate environment.”
New construction gets pricier.
Construction prices inched up 0.5 percent in October, reflecting a 7.9 percent increase year-over-year, according to the Bureau of Labor Statistics Producer Price Index. That’s something investors should be watching closely in the year ahead, says Lee Roberts, managing partner of SharpVue Capital in Raleigh, North Carolina. “In addition to supply-demand factors, there is a large policy component to this,” Roberts says. “Not only are interest rates being driven higher by the Fed, but materials costs are being affected in part by trade policy, while labor costs are moving higher in part due to immigration policy.”
Build-to-rent gains momentum.
Build-to-rent is a relatively new trend, says George Maravilla, vice president at Tower Capital in Phoenix, but poised to expand. “These newly built and to-be-built rental communities have a lot of the conveniences and amenities of an apartment but feel more like a home,” Maravilla says, and as more developers move into this space it’s likely to join the mainstream of CRE asset classes. Build-to-rent communities are designed to fit the privacy and affordability needs of younger buyers shopping for a mortgage loan and boomers looking to downsize. Maravilla says build-to-rent represents a new frontier for investors with a pioneer mindset looking to diversify into non-traditional housing.
Real estate investment trends you can expect in 2019
Real Estate Growth In Charlotte, Houston And Salt Lake City
Back in November, Amazon chose New York’s Long Island City and Arlington, Virginia as the new home for its headquarter locations after a yearlong search. 💲 The cities who prepared for a possible landing of Amazon’s headquarters but didn’t make the cut may benefit from the preparation more than they anticipated. Cities that are showing economic growth since Amazon’s search for the next headquarters are Charlotte, North Carolina; Houston, Texas and Salt Lake City, Utah.
Here is fancy graphic that outlines the perceptions of the Real Estate Investing Industry and the differences between the way Men VS Women see it.
And it proves that people are starting to catch on to the power of investing in Real Estate…
…which means if you don’t act now, you’re going to look back in 5 years and KICK YOURSELF for not taking action sooner.
Check this out:
What can we take away from this?
The consensus is in: Real Estate holds the highest perceived value of investing out there. And there is a reason why it does.
a. It’s a secured method of investing – even when the economy goes to the crapper, if you’ve invested wisely, and saved yourself % off of Market Value on the property, you will be in an incredibly lucrative place when the economy rises back up.
b. It holds its value, and even increases in value as time moves forward (At a much more rapid rate than stock markets and other investment strategies)
c. People think it’s the best investment
Are you ready to invest in Real Estate for this new year?
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In this episode of the Keiser Report, Max Keiser and Stacy Herbert discuss the impending second wave of the lastest mortgage crisis, this time due to Helocs (Home equity lines of credit) and HAMP (Home Affordable Modification Program) interest rate resets. In the second half, Max interviews Aaron Krowne on the true state of the housing market across America – from home ownership rates to mortgage arrears.
In 2008, the nation entered into a financial crisis widely believed to have been caused by excesses in the residential mortgage industry. By 2010, the nation thought it had put in place a series of measures that not only would resolve the crisis but would insure that it never happened again. Yet, here we are in 2015 looking at another potential mortgage crisis. Only this time it is different. In 2008, funds flowed in waves into the mortgage industry. In 2015, it appears the funds are drying up.
Gold Spot Price
If we remember what the price of gold was back to 2001, US$271 per oz, to the end of the the best world economic era, (2008) the gold price went up to US$872 for the same ounce. If we are in the middle of another mortgage crisis, what do you have to do? Learn more [Should you buying gold?]
What are you going to do?
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