Real estate investing is something I am very passionate about, and have experienced great success thus far in finding spectacular investing opportunities for my clients. For those of you who are new to investing in real estate, or even seasoned veterans of the investing game, I’m here to highlight some of my favorite industry tips for how to get started and make the best decisions when investing in your next property.
The Basics
Let’s start with the basics! What exactly does it mean to “invest” in real estate? Well, to put it simply, real estate investing involves the purchase, management and sale or rental of real estate for profit. Improvement of realty property as part of a real estate investment strategy is generally considered to be a sub-specialty of real estate investing called real estate development. I have many clients reach out to me in search of investment opportunities throughout New Jersey. Where and when you choose to invest, however, is ultimately up to you (with the guidance and expertise of a real estate professional like myself).
Why Invest?
There are so many benefits to real estate investing! Some of these benefits include but are not limited to:
- Steady cash flow
- Great ROI
- Long-term security
- Tax advantages
- Diversification
- Passive income
- Ability to leverage funds
- Protection against inflation
- Chance to build capital
- Sense of fulfillment and control
Whether you’re a first-time investor or a seasoned pro, there is much to benefit and gain from putting money into real estate.
Tip #1: Knowing the Different Types of Asset Classes
When investing, it’s important to understand whether the property will be used for commercial, residential, use or special use which is a property that is appropriate for one use or limited use: a building that cannot be converted to another use without a large capital investment.. This differentiation allows you to understand and have a better strategy around how you can best optimize and maximize the ROI on the investment.
Tip #2: Understand the Different Types of Investment Strategies
Define your strategy as early in the process as possible! It’s critical that you decide whether you’re going to buy and hold a property for rental income, or if you’re going to add value by fixing and flipping. There are even opportunities in ground-up development and land development! Defining your investment strategy will set you up for success throughout the rest of the investment process. If you don’t know where to start, or if you’re having trouble defining which strategy will be best for you and your investment portfolio, I am always here as your expert resource in helping you devise the right investment opportunities.
Tip #3: Take Advantage of the Market Data That We Have Available to Us
Utilizing market data such as the number of property sales in the area, vacancy rates, rental return rates, and growth rates (year-on-year and past several years) is critical in the investment process. This data can be made available to you through an agent who is up-to-date on all happenings and trends, and will be a huge driver in the decision-making and strategy development processes. Make sure your comps make sense! Do not compromise on buying a property if it does not favor you.
When in doubt, talk with a top real estate agent who knows your local market inside and out and who will help you weigh both your personal and financial motivations when investing in real estate.
Let’s connect today to get your house listed at this optimal time to make a move! Contact me today!
