Homes and apartments are in short supply these days. Investing in real estate is a great way to grow your net worth. With these real estate investing tips, you can even make an income on your investment.
From understanding the local market to what updates will help you get more rent, we have rounded up everything you need to know about real estate investing. Whether you want to buy an investment property for yourself or as a rental property, we are here to help. Think of this as your go-to guide for real estate investing.
1. Know Your Market
Real estate investing is not just about buying multiple properties. It is about where to buy your properties. A good real estate investment is one that helps boost your net worth and, if you would like it to, makes you an income.
Before you buy an investment property, it is helpful to speak with our team of realtors about the market. We can help you pick a location that works for you. Consider how you want to use the property, what type of property you would like, and what you want to be close to.
These questions will help us pick a market that is a good investment for you. Looking at market compatibles, nearby rents, and occupancy rates is also key. If you are looking to buy a rental home, for example, take a look at how many homes are currently being rented and what is vacant.
2. Create an Investing Strategy
Before you buy a property, you will want to create an investment strategy. This is your chance to map out your budget and goals. Maybe you want to rent out a home or maybe you are looking to buy a multi-family home.
Creating a strategy will help you on your house hunt. It is easier to narrow down a property when you have a plan in mind. This will also help you with your financing. Consider if you are getting a mortgage or if you are buying the property in cash.
Investing in a new property may also mean selling another one. We can help you buy or sell to help you reach your goals.
3. How Will You Use the Home?
Whether you are buying a second home or even your fourth, this is an exciting time. Before buying your investment property, you will want to consider how you are using the home. Is this a long-term rental property or a vacation home?
Are you buying the home for yourself and your family or as a seasonal rental? These questions will help you on your house hunt. A vacation home, for example, can be used only for your family or a rental property for vacationing tourists.
How you use the home will determine if there is any income potential with the home. If you do not plan on renting it out, maybe you have a more long-term goal of growing your net worth. A vacation home, for example, will still appreciate in value over time.
How you use the property will also determine where it is located. A short-term or long-term rental will give you the income you can use today. You can pay your mortgage with the income or use it to grow your net worth.
Before buying your rental or investment property, you will want to gather all your financial information. Consider whether you are buying the home in cash or obtaining financing. Think about if you need to sell another home in your portfolio and how you would like to do so.
Buying a home in cash means there is no lender or bank to deal with. This also means no interest fees. Buying a home with a mortgage, however, means more cash in your bank account.
If you are fixing up a home or apartment, you may want to keep some cash aside for improvements. Some investors put less money down to use towards renovations and refinance after construction. Other investors pay for renovations in cash along with their homes.
Getting your finances in order will help make the home buying process easier. Speak with your lender about getting a second mortgage or using this home as an investment property. There are several different mortgage options available depending on how you use the home.
5. Updates to Help Boost Your Property Value
Updating your investment property will help boost the property value. Whether you are using the home for yourself or renting it out, even small improvements can go a long way. To start, make the exterior as inviting as possible. This will help get more rent if needed.
Next, focus on the kitchen and bathrooms. If you are renting out the home or apartment, go with durable materials in a neutral look. Flooring in luxury vinyl, for example, can stand up to renters, water, and scratches.
New appliances and countertops will help make the home look and feel more updated. These will also boost the value and increase what you can charge in rent. If you are looking to increase the number of people who can sleep in the home, consider adding walls to make more bedrooms.
A rental home that has three bedrooms, for example, will get more rent than a two-bedroom home. In a rental home, unused formal living rooms, will not give you as much bang for your buck as a bedroom. These improvements will go a long way in terms of property value and rent.
6. Small Changes to Command More Rent
If you are renting out a home or an apartment, even small changes can have a big impact. If your budget is tight, there are also plenty of projects you can do yourself. Consider fresh paint, for example. This is inexpensive and you can likely re-paint yourself over a weekend.
Consider staining or painting cabinets in the kitchen. This gives them an updated look for only the cost of the paint. Change out hardware and light fixtures to help breathe new life into the property.
Update old carpeting or add area rugs to spaces with outdated flooring. If you have any outdoor space, invest in some small outdoor furniture to give your renters or vacation guests a place to hang outside. This adds to your square footage and makes your home more inviting to renters.
Keep your rental home as neutral as possible. You want everything to look clean and bright, so it appeals to more people. Renters can add their own furniture or style later on.
7. It’s all About the Details
If you are renting out a vacation property or a short-term rental, you’re likely renting out a furnished home. This means you want to choose durable furniture that can stand up to heavy traffic.
Go with a neutral pallet that appeals to most people. Renters also want modern conveniences. Give them easy access to plates, dishes, towels, and any comforts you think they may need. If you are by a beach or water, for example, have beach toys and life jackets on hand.
These little details will help you rent your home. Renters will feel welcome and well taken care of. Think of all the little touches you would appreciate while on vacation. This could be anything from water bottles in the fridge or a crib for families to use.
8. Using Great Marketing Tools
Great marketing tools will help you rent your property. From virtual tours to photographs, you only have a few minutes to grab a renter’s attention online.
Home supply is at an all-time low. Great marketing will help you grab eager renters looking for homes. Make it count with the latest marketing tools.
9. Sell Your Amenities
If you have great amenities at your rental, show this off. Maybe your rental property has a pool or gym inside the building. Showing these amenities will get you more money for rent.
10. Showcase Your Location
If your home is located in a great location, you want to show this in your marketing. You can get more for rent if you are located near amenities or public transportation.
If you live close to a coffee shop or the beach, add this to your rental information. In a vacation home, you can also make a little map for guests.
11. Being a Good Real Estate Investor
Being a good real estate investor also includes being a good host and landlord. If you are renting your home, you will want to make sure it is well-kept and taken care of.
You will get more for rent if your home or apartments are up to date. Stay on top of repairs and keep the property in good shape.
Real Estate Investing Tips For Beginners
Whether you are looking to buy an investment property as a rental or to use yourself, you have come to the right place. With these easy real estate investing tips, you can grow your net worth and even make an income collecting rent.
From investment properties to second homes and vacation rentals, we have got you covered. To get started finding your investment property, fill out the contact form here. You will be connected with a real estate professional who is ready to help.