How to Find Investment Properties

How to Find Investment Properties

Investing in real estate is an exciting opportunity, but, for those new to this type of investing, there are many unanswered questions. One of the biggest concerns new investors face is in finding the opportunities that will earn them a good return on their investment. There are actually a number of different ways to find new real estate investment opportunities, but you will still have to do your due diligence in researching any property you do find.
The Grapevine
This is still the best way to discover new properties that have just been listed and those that may be hitting the market soon. Since most properties don’t stay on the market for long, finding out about them early is often vital. Let people know you’re looking and you may hear about listings ahead of the public.
Craigslist
It’s hard to meet anyone who’s not familiar with Craigslist and it nears the top of the list for the most visited websites in the world. Think of it as a global classified ads site and you’ll begin to understand the significance it plays for investors. You can find deals for just about anything on Craigslist and that includes real estate.
Do Your Own Marketing
This is similar to word of mouth advertising, except that you’re trying to reach a much larger audience. By using print and digital marketing to notify the public about your real estate investing interests, you’ll bring sellers to your front door. This can help you find opportunities that will never reach the public eye if you act quickly enough.
LoopNet
This is a real estate listing site that specializes in sharing listings for commercial properties. The site hosts listings for apartment complexes and smaller multifamily homes as well as for restaurants, shopping centers, and other small business real estate ventures. LoopNet is often a good site to visit to find your next investment opportunity.
As you search the internet, you’ll likely find more sites that offer listings for real estate investment opportunities. While you may have to continuously check these sources until you find the right venture, your perseverance will pay off. It’s better to search for a longer period than to jump into an investment opportunity that carries too much risk. If you take the time to determine what you’re looking for in an investment opportunity, your chances for success will be multiplied.
Why You Should Invest in Single-Family Rentals

Why You Should Invest in Single-Family Rentals

After a year marked by stock market volatility, many investors are looking for alternative investments to stocks. Such investors should consider the advantages of investing in single-family rentals.

High Demand 

A low level of homeownership is one reason single-family rentals are in high demand. People are not seeking homeownership at the high rates of the past. Some seek single-family rentals to maintain their freedom to live anywhere. Others are would-be homeowners, but they have large amounts of debt from student loans and credit cards that make it difficult to qualify for or to pay a large mortgage.

With unemployment low and rising wages, strong job growth also is contributing to the high demand for single-family rentals. The country’s healthy labor market also is one factor that is leading the Federal Reserve toward a rise in interest rates, which would result in higher mortgage rates. An increase in mortgage rates would be good for investors in single-family rentals. Some people will continue renting because higher mortgage rates will price them out of homeownership.

Low Inventory 

Currently, there’s a low inventory of single-family homes. The combination of high demand and low supply means landlords can charge more in rent (see below).

Rising Rents 

A single-family rental has excellent potential for providing investors with positive monthly cash flow because rents are rising. Rental rates are expected to continue increasing in the near future.

Increasing Asset Value 

The value of single-family homes has increased over the past year and is forecast for continued growth in 2019. Long-term investors in single-family homes are likely to see these assets gain value over time.

Asset Volatility Unlikely 

Asset volatility is common in the stock market. However, prices in the housing market are not correlated to the stock market. The stability found in the real estate market may be attractive to equity investors.

Different Tenants 

Cultural shifts and demographic changes have put new faces on tenants who rent a single-family home. Young adults are not putting the cultural value on homeownership that previous generations did. Although many young adults aren’t planning a home purchase, they still want the benefits of a single-family home, such as a yard and additional bedrooms, for their children. Downsizing baby boomers rent because they either cannot afford or don’t want a new mortgage.
3 Ways to Invest in Commercial Real Estate

3 Ways to Invest in Commercial Real Estate

3 Ways to Invest in Commercial Real Estate
When the topic of real estate investing comes up, most people think of fix and flip opportunities. While that was once considered a valued method for building wealth, it’s certainly not the only way to get started in investing in real estate. By looking at several options, you may identify a method that best appeals to your skills and resources.
Directly Investing in Commercial Property
The fix and flip is starting to die out as people realize this isn’t the get rich quick scheme that television suggests. However, buying into a commercial property and holding onto it as a source of rental income is a legitimate way to make money in real estate. It requires patience and commitment because it will require you to maintain the property in good condition. You will also have to manage tenants and ensure each unit is consistently providing income. If you have the time and passion to devote to a commercial rental property, this may be the investment for you.
Becoming a Limited Partner
As a limited partner, you invest capital into a commercial rental property, while allowing another partner to manage the day to day operations. While you may get a say in how major decisions are handled, you leave many of the operational decisions up to the general partner. You simply invest capital along with other investors and, in exchange, you own a percentage of the property. If you want the perks of real estate investing without having to get your hands dirty, this is one way to accomplish that goal.
Invest in an REIT
Also known as a real estate investment trust, an REIT is essentially nothing more than a mutual fund that invests in real property assets. Each REIT focuses on a certain type of asset, so you can choose a REIT that invests in commercial shopping centers or one that invests in multi-family homes. The benefits here are that you don’t have to devote much personal time to the investments, while the REIT diversifies your holdings to maximize your potential for growth.
These are a few of the most common ways to invest in real estate. As mentioned, each type of investment requires a different level of personal involvement. This may be one of the deciding factors in determining which type of investment is right for you. Alternatively, you may choose to try multiple types of real estate investments to maximize your earnings. Your personal tastes and needs will determine which strategy is best for you.
A Beginner’s Guide To Investing In Industrial Real Estate

A Beginner’s Guide To Investing In Industrial Real Estate

 A Beginner’s Guide To Investing In Industrial Real Estate

Industrial real estate has long played second fiddle to more consistent investments like apartments and traditional retail outlets, but industrial investment is suddenly breaking out in a big way. The past few years have seen a steady 10% growth in the market, and the market was valued at almost half a billion in 2017. It’s a trend that’s likely to stay steady, bolstered by the growth of e-commerce and the need for more warehouses to support their operations. If you’ve ever considered investing in industrial real estate, now’s the time, and here are some tips that can help you make the most of your money.

Determining a Property’s Value

The industrial sector has been in decline for some time, and that means that there’s less in the way of formal standards for evaluating their value. You may have to do some extra work to figure out a property’s worth. Start by measuring the square footage and comparing it to other warehouses in your region. From this baseline, you can adjust the value by using a number of metrics like age, security, and the presence of useful equipment and technology.

Determining the Right Location

While residential and commercial properties have fairly similar standards for desirability, warehouses follow different rules. The one major selling point for a warehouse’s location is how well positioned it is to deliver product efficiently. The ideal location is situated near a major transit hub like an airport or seaport as well as a centralized highway. And while that’s the principle thing to keep in mind, picking a warehouse that’s near a major population center can also be a huge selling point that can increase your property’s values significantly.

The Advantages of New Properties

The obvious choice for new investors might be to put their money into aging warehouses. Older warehouses in urban areas are often outperforming newer developments due to their location, but there are a couple of reasons why they’re unwise choices for a long term investment. The scarcity of these locations makes them highly competitive targets, and many of them aren’t equipped to meet the needs of new e-commerce retailers. Their lack of height means that they aren’t well-suited to the more efficient verticality of modern warehouses, and upgrading them to accommodate the robotics that power the modern warehousing industry is so costly that they can’t really be seen as an economically frugal alternative to newer developments built from the ground up to meet the needs of tenants.

 
Are Apartments A Good investment?

Are Apartments A Good investment?

Are Apartments A Good Investment?

Apartments have been a fairly good investment for the better part of a decade. That is still the case. Other options may have become more tempting over the past few years, but there are fairly fundamental economic trends that ensure apartments remain a good choice for many investors.

The Big Picture

Humans need homes to stay safe, healthy, and comfortable. That is a fundamental fact of life, and no amount of technology or economic development is going to change that. Apartments are an affordable way for many people to get a home, and the relatively flexible nature of renting appeals to people who aren’t quite ready to settle down. That means that there will always be plenty of demand for apartments. The precise level of demand can fluctuate over time, but there will always be some.

Of course, some investments are better than others. Those who take the time and put in the effort to get the most out of their properties will generally see a much bigger return on their investment than those who do not.

Find Ways to Add Value

Increasing the value of a property is a key part of getting a good return on a real estate investment in the modern market. Most investors will want to consider paying to add amenities that appeal to renters in their area so they can command higher prices and attract more residents. Lowering operational and maintenance costs, or even looking for tax incentives can also be very effective ways to get a better return.

Choose Locations Carefully

It is always best to look for areas with a steady demand for housing before investing in apartments. In general, renters are looking for places with easy access to amenities and jobs. As with all investments, the price is also a factor. Examining local trends is a key part of determining the value of an investment.

Do the Research

Apartments are still a fairly good investment, especially for people who understand how to get the most out of them, but the golden rule of investing still applies: Do the research. Every region’s market is unique, looking at all of the options and honestly assessing them is vital for success. Investors who do their research and pick their investments carefully are the most likely to find success with apartments.

Best Markets to Invest in Real Estate in 2019

Best Markets to Invest in Real Estate in 2019

With incomes soaring in urban hot spots like San Fransisco, Seattle and Los Angeles, housing prices appreciated significantly as well. However, large year over year real estate returns in these markets increases the risk of an eventual crash, leading investors to search for new real estate markets for growth and/or stability.

Financial advisers are increasingly recommending cashing out of these markets now, rather than wait until the market has peaked. Although the stock market has performed well in recent years and the unemployment rate is very low, most job growth has taken place in the lower ends of the income distribution. This means that there should be a steady demand for apartments and cheap housing, while expensive housing markets may start to decline. So, where should investors be looking to for their next opportunities? Here is a list of the most promising real estate markets in 2019:

Orlando, FL

This city is seeing the largest job growth on the list, at 4.7%. This figure has increased from 3.8% only 6 months ago. With home prices increasing slower than incomes (10% vs. 20%), this market looks due for a solid upward swing. With home prices rising fast, however, investors would be wise to move quickly.

Jacksonville, FL

Another Florida town, Jacksonville is seeing 3% job growth and also has relatively affordable housing at its current market levels. The average home price is $270,000, well below average for the best potential markets.

San Diego, CA

This Southern California city is attractive for many reasons. San Diego boasts perhaps the best weather conditions year round of any American city. It also has the biggest difference between home price increase and income increase (7% vs. 21%) on the list. This suggests that although prices are relatively higher ($514,000 average), there is still a lot of room for the market to grow.

Silver Spring, MD

This Maryland town is a great opportunity for investment in apartments. With its close proximity to Washington, D.C, there is a steady demand for housing in the area. Housing prices are quite high in the area, so people will be looking to rent here. The average rent in Silver Springs is lower than that of nearby Washington, D.C’s ($1,398 vs. $1,646), which suggests there is room for growth here as well.
Investing in an Airbnb Property

Investing in an Airbnb Property

Airbnb is undoubtedly leading the way for the vacation rental ownership market. Airbnb is a worldwide sensation with properties located in 190 countries. As of November of this year (2018), 640,000 people have invested in and are hosts of an Airbnb property.  As others see the popularity of the site and its competitors, many wonder if they should jump on board and invest in their own vacation rental property.

Investing in an Airbnb Property

Many people that would’ve otherwise never thought to rent out their home or apartment are looking into buying a piece of property just to get in on the popularity of Airbnb. Thinking of doing the same? Before you invest there are a few considerations you will want to take in account:

1. Research the Local Rules and Ordinances

Before purchasing a property for short-term rental, research the rules and ordinances in the area. Some cities enforce certain rules that limit short-term rentals in favor of long-term rentals. Depending on where one lives, they may find that investing in an Airbnb property breaks the law.

Moreover, some local rules force renters to pay additional taxes and fees on the income generated with their Airbnb. Similarly, these renters may also be forced to obtain certain licenses to be able to rent out their property.

2. Ensure that the Property Can Also Be Used for Long-Term Renting

Buying a property specifically for Airbnb? Be sure that the property is also available for long-term renting. As business is always ebbing and flowing, it isn’t feasible to solely rely on revenue from short-term rentals.

3. Keep Tax Rules in Mind

Renters that set their Airbnb property lower than the market value may find that they are disqualified from using the property as a tax write-off. Before setting the rates or the property, research the IRS tax code and ensure that the property is in accordance with federal guidelines.

4. Review All the Expenses of Your Short Term Rental

While renting a room in one’s apartment on Airbnb requires little additional effort, renting an entire property tack on extra responsibility for the renter. In addition to maintaining the property by repairing and cleaning it, the owner must pay for the water gas, cable, electric, and Internet. All of these should be reflected in the price of the rental.

Don’t invest in an Airbnb if all the aforementioned considerations haven’t been made. Failing to consider these four things can turn a potentially profitable investment into a loss.

How to Research Investment Properties Before You Buy

How to Research Investment Properties Before You Buy

There’s a level of risk inherent to any investment, but successful investors can tell you that making money in this manner should never be a game of chance. Research constitutes a significant portion of any investor’s job, and that’s especially applicable when dealing with real estate. Any number of factors could affect the value of your property, but these tips can help you get some sensible grounding in the industry.

Learn the Lay of the Land

The value of a property is about a lot more than the size and quality of the home. The neighborhood and city it occupies is just as important, and getting a feel from the street level can help you not just predict what the property is worth now but what it might be worth in the future. If possible, you’ll want to make sure to visit the house itself so you can get an understanding of the local traffic situation, aesthetics, and access to entertainment and public facilities. Driving around can give you a big picture understanding, but going out on foot is just as important. Speak with local business owners and residents to get an understanding of the attitudes and get to know about upcoming development projects. This can be a good barometer for how well you can expect your property’s value to grow.

Assess the Market

There are a number of online resources that can help you determine if the property you’re looking at is a smart investment or a money trap. Check with a local Realtor or with online rental directories to get an understanding of typical rent in the area, and then evaluate that against your budget and the cost of your investment. Zillow can be a great resource here. You can also dig up the mortgage and lien history on your property directly. This information is public record and can be uncovered online without too much effort.

Scope Out Total Expenses

Figuring out the cost of your investment is about more than just comparing the cost of your mortgage to the average rent. You also have to take utilities, maintenance, and insurance into consideration. This will help you more accurately determine what your overall costs can be. And while some owners may be reticent to give up this information, the promise of a reliable buyer can often encourage them to be transparent with that data.

After putting these tips to use and conducting thorough research, you are ready to make your investment!

The Best Country for Real Estate Investment

The Best Country for Real Estate Investment

As humans, we like things orderly, and it’s in our nature to look at all the important things and rank them. But life is generally more complicated than that, and “the best” is often subjective and subject to any number of different factors. That’s as true for the world of real estate as anywhere else. In short, the best place for investing in real estate is determined by your own situation, your unique ambitions, and your interests. In short, everyone’s best country for real estate investment is different.

That means that you should be asking yourself some important questions when it comes to deciding where you’d like to invest your money. You’ll want to begin with the practical considerations of what resources you have available to you. Finances are a big factor here. The Georgian market, for instance, won’t pay sizable returns on investments that aren’t in the six figures, but less developed countries could see a better return with a smaller investment. Just keep in mind that these regional markets are always shifting, so staying abreast of shifts in the market and assessing your finances is of critical importance.

It’s also important to consider that while less developed countries than the U.S. can result in more generous profits, the onus will be on you to do more of the heavy lifting. That means that you need to consider your education level within the industry and how much time and effort you’re willing to devote towards your investments. These will serve as a major determinant factor in your ideal country for investment. Frontier markets can make you a lot with relatively little cash upfront, but you’ll be working that much harder to get yourself set up.

And while frontier markets may be great in the long term, you’ll want to consider whether yield of appreciation is more important to you. Investors with more money to spare and less need for cash upfront will find the best results in economies like Georgia that are likely to see substantive increases in property value over the course of years or decades. Those just looking for some quick monthly income could look as close as Rust Belt states in The U.S. where they can easily earn between 20 and 40% yield.

It would be insincere to make a list of the best investment markets, both because these change regularly and because they’re highly circumstantial. What works for you is going to be decided by your situation, and that means undertaking a level of personal research to track down the market that meets your needs.

How to Figure Out if Your Investment is a Good Deal

How to Figure Out if Your Investment is a Good Deal

Investing in real estate can be a lucrative experience, but it doesn’t come without its share of risks. Before you invest your savings in any real estate venture, it’s important to do enough research to help you feel confident that the risk is small compared to the potential gains. Even then, employing certain tactics, such as those listed here, can help you determine if you’re taking a good risk.
Follow the 1% Rule
The 1% rule states that you should be able to rent the property out for 1% of the purchase price. Following this rule means that you can expect to generate a positive cash flow, which will make the investment profitable and worthwhile. If you can’t reasonably expect tenants to pay rent equivalent to 1% of the property’s value, you’re better off looking for a more promising investment.
Ignore the Media Hype
There are a number of television shows that push the idea that you’ll make a fortune off every investment. Instead of buying into that, concentrate on turning a profit. Even a small profit is better than nothing. The best way to do this is to buy the worst property in a good neighborhood and fix it up as cheaply as possible. Go for the less expensive countertops and appliances. After all, these items are easily replaced.
Calculate the Cap Rate
This is an equation investors use to determine the profitability of any investment. It compares the purchase price to the potential income. The cap rate helps you determine if you will be able to earn back your investment within one year of owning the property. If not, this would be considered a bad or high-risk investment.
Look at the Listing
If there’s a noticeable lack of photos and information in the listing, you can expect to do more work on the property. That doesn’t necessarily mean it’s a bad risk, if you’re willing to do the work. In many cases, these types of properties are priced to sell and the seller just wants to get rid of it. This is an opportunity to save money on the purchase price and maximize your investment, although the location of the property should still be considered.
There are many more strategies for identifying the risk of investment properties. As you become more experienced, you’ll develop your own ability to identify good and bad risks. Even when you estimate something to be a good risk, you may still misjudge the opportunity. Mistakes will happen, but perseverance will help you turn those bad investments into profitable learning experiences.