Should You Buy Investment Property?
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Buying and selling real estate, whether in the short term or
long term, has been a consistent form of wealth building for decades. Everyone knows this, almost everyone
considers it, but most people do not seize the opportunity, for a variety of
reasons. In my opinion, the current
market presents an excellent opportunity.
The path to success, however, requires that you think of it like
starting a business.
One concern that I constantly hear is, “how do I know the
property will go up in value?” The
reality of real estate investing is that you make your money when you buy. Experienced buyers purchase property at
a price that assures them increased value.
If you are buying and hoping it will go up (like in 2005-2007) you are
speculating. It is always a good time to buy the right
piece of property. The questions to ask
are, what determines the right property, and am I in a position to buy
financially?
First, let’s look at a couple “types” of buyer who find
themselves considering an investment property purchase. My experience has been that those who ponder
this the most are: mobile singles who
can buy, fix and flip, those planning for retirement who would like to buy an
investment property then convert it to their primary residence, professional
investors, and everyone else.
There are specific advantages and disadvantages to real
estate investing for each of these groups; mobile singles can move to take
advantage of opportunities, but they can also find financing difficult, and
sometimes their mobility-mindset will cause them to take advantage of an
employment opportunity that conflicts with their real estate investment time
line. Those planning for retirement can
find themselves the perfect retirement location, only to have their plans
uprooted by relocated children and grandchildren, medical issues and more. Professional investors make fewer mistakes,
but also have more difficulty finding financing at times.
There are many advantages to investing in real estate, primarily
the accumulation of wealth. While you
must consider the housing market, the financial market and taxes, with the help
of experienced professionals, you can make educated decisions and take
advantage of this market. Like starting
any other business, you must perform your due diligence up front, with the help
of experienced professionals.
If you have thought about investing in real estate, please
call me to discuss how you can take advantage of this unprecedented market.