Let’s face it… A lot of real estate investors are priced out of California, and prices are continuing to climb. Here is an example. In 2012 an investor could purchase a 3 bedroom, 2 baths, 1592 square foot house, that needed updating, for $390,000. It would rented for $2,300. Today, that same home is worth $1,000,000 and could rent for $3,800. A 25% down payment is the sweet spot for the best interest rate so it took about $100,000 to get into the property in 2012. Today, that same 25% equates to $250,000… it’s wild! It simply costs a lot more to join the ranks of investors.
There are many less expensive markets that offer more affordable investment opportunities. The most affordable markets include Tennessee, Florida, Ohio, Mississippi, Missouri, Nevada, and New York. The median home price in Buffalo, New York is $200,000 compared to about $800,000 in San Diego, California. It might make a lot of sense to look to other markets.
Every investor needs a plan. Without a plan you’re looking to get lucky with your hard earned money. A basic plan should start with numbers. Answer the following questions…
How much money do you have to put towards your purchase? Do you have 25% of the purchase price to put down? Are you willing to contribute to the payment every month if needed? Is your credit in order? What markets are you familiar with? Have you looked into different markets? What’s your goal or purpose? Are you looking for cash flow? Are you looking for long term appreciation? Are you looking for debt pay down? What’s your timeline?
Maybe your plan includes saving for the necessary down payment and closing costs. Maybe your goal is to own a property free and clear when you retire. There is a lot to consider.
Once you have a goal it’s time to connect with our partners. We partner with great Loan Officers who can offer financing all over the country. We also partner with outstanding Realtors® in every single state. Our company is part of a broader network of Realtors® that makes up the fastest growing real estate company, and the highest producing group of Realtors® in the country. We have your covered!
Once you have purchased your investment property through the assistance of our stellar partners you’ll want to hire a Property Manager. A seasoned Property Manager plays a crucial role in your investment. They find and screen tenants, collect rent, and work to maintain the property on your behalf. Without the benefit of proximity to your investment you’ll find a Property Manager invaluable.
Reach out to the professionals at Market Real Estate to start your journey into the world of investment properties. We’re here to help.
