By Joyce Morse for HeadlineFinancial.com
If you are looking at solid investment opportunities, you might want to consider real estate. While many people have avoided this area because of the housing market devastation, it bears another look. Real estate can provide one with a great return on investment and a continual income, and it will continue to do so in the future.
Nowhere to Go but Up
When the housing market bottomed out, many potential investors looked elsewhere for investment possibilities. However, real estate works just like any other market; buy low and sell high. Right now, we are in the buy low time period. Here are some reasons to look into real estate for your investment portfolio.
- Mortgage rates are low so you will pay less on interest.
- More foreclosures mean more renters to allow you to use your property as a rental.
- Houses are at their lowest prices in years because they have not been increasing in value at the same rate as normal.
- Tenants often prefer houses to apartments, which means you will have a good selection of renters and be able to find the best tenants.
- Renters prefer private landlords instead of rental companies, so you will have people competing for your house.
A Long Term Investment
You have to look at real estate as a long term investment, not something you buy today and sell tomorrow. Even if you buy a property to fix it up and sell it, you will want to have a positive cash flow, and see the value of your investment rise over the long term.
If you buy a house today, it will have a higher value in thirty years, making it a profitable investment. If you use it as a rental property in the mean time, you will have tenants making your mortgage payments for you so you come out even further ahead.
Tips for Investing in Real Estate
To be successful in the real estate market, here are some tips to follow.
1. Know the average prices in the market. This includes what similar houses to the one you are looking at are selling for and what rent is worth on that house. That way, you will know what you need the mortgage payment to be for the rental income to cover it.
2. Get an appraisal and an inspection. The appraisal will show you what the house is worth and an inspection will alert you to any major repairs you will need to do in the near future.
3. Work with a respected real estate agent to help you make the right decision. They can explain terms to you and give guidance about the different properties and the surrounding areas. It is worth the agent’s fee to have a knowledgeable expert to assist you in the process.
Real estate has always been and will continue to be a good investment. You just have to know what to buy to get a good deal.