While there are risks with any type of investing, choosing to invest in residential real estate may offer the lowest risks. As long as you do your research on each property, and on the market in your area, there’s no reason you can’t turn a profit on these types of investments. To get you started, here are a few things you should know about residential real estate.
Don’t Restrict Your Search
When people are looking for investment real estate, they tend to look in their own areas, but this can be a mistake. If your own home, your day to day job, and your real estate investments are all in one market, all of your resources are tied to the performance of that market. It can be a wise move to seek out real estate in neighboring markets, so your assets are spread out among multiple markets.
Consider the Benefits of a Property Management Firm
While you don’t have to hire property managers, they can help ease your day to day obligations, which may free you up to pursue your other daily duties. Property managers take a small percentage of rental payments as their fee. In exchange, they collect rent, screen new tenants, maintain the property, and act as a buffer between the tenants and yourself
This is the Best Time to Buy
If you have been considering investing in residential real estate, there has never been a better time to act. The unemployment rate is low, which means the economy is doing well, and more quality tenants are searching for rental properties. Additionally, interest rates are also at record lows, so buying investment property now is a smart financial move. You’ll save money on your loan payments, and keeping your property occupied will be easier.
People are Looking for Single Family Rental Homes
More and more people are interested in renting single family homes, because they offer more flexibility than buying, and they’re often less confining than apartment units. In some cases, people just aren’t ready to buy, and renting a single family home gives them the space and privacy without sticking them with a 30 year mortgage.
Provided you do your due diligence, investing in residential real estate can be an exciting and lucrative venture. It provides you with an opportunity to give back to your community by ensuring homes in your neighborhoods are continually updated, while giving you a source of passive income. It all comes down to researching new opportunities, and following your instincts.