Whether looking to launch a business venture or create secondary revenue streams, real estate is an attractive option. If you are planning to enter this arena, you’re far from alone. And there has never been a better time to get started.
But while you’ve probably conducted a good level of research, it’s also very likely that you’ve overlooked some key features. Strengthen your position with the following advice and your hopes of success will look far greater.
#1. Mobile Homes Are A Great Starting Point
When looking for your first real estate investments, most people jump straight into houses or apartments. Mobile homes aimed can be a great alternative. Specialists like Alamo Homes can help you find the perfect properties. Aside from affordability, their maintenance costs are very low while over 22 million Americans live in them too. So, there is a strong demand, especially in the current financial climate.
If renting the mobile homes out, you will also find that tenant turnover is quite low. Most mobile home residents, especially seniors, will want to stay there for life.
#2. Multi-Unit Property Funding Is Often Easier
When first starting out, one of your goals will be to build a portfolio of several assets. However, funding purchases is often the most challenging aspect. Multi-unit properties may provide the perfect solution as they are often easier to finance. Lenders like JP Morgan view them as a smaller risk because you only need to fill a percentage of the dwellings to break even. Many investors will subsequently be able to build a large portfolio in quicker times.
As a new investor, the fact that this offers easier management is a positive factor too. Managing real estate across multiple cities may feel overwhelming.
#3. Operational Costs Will Impact Your Efforts
Just like any other business venture, it’s important to view the whole picture. So, it’s not just about calculating the purchase price or loan agreement against the rental income or sale price. Expenses related to property management and maintenance and business insurance are all key. Similarly, expenses like communications must be taken into account. Otherwise, your accounts will look vastly different to what you expected.
If nothing else, taking the operational costs into account will allow you to know how much room there is for negotiations on prices. It’ll also encourage cost-efficient spending.
#4. It’s Not Easy
Real estate is one of the most stable investment arenas, not least because assets can appreciate at a rapid pace. Still, you should not be fooled into thinking it’s a quick and easy route to money. If it were, everyone would be doing it. As such, you need to stay up to date with the latest property trends, understand taxes, and know what to look for in a property. Likewise, you may be tasked with completing upgrades to the property.
Even if you want to take a passive approach to real estate investment, it will consume a lot of thoughts. As long as you accept this fact, you won’t go far wrong.