Real Estate Investing 1013/1/2021
Due to our unprecedented surge of home values and record low interest rates, I have had many clients ask me about real estate investing. Whether it's buying a rental property, flipping a home, or becoming a wholesaler, here is what you need to know:
1. Flipping? Renting? Decide: First you need to decide if you want to find a home, fix it up and sell it or want to keep it long term as a rental. There are pros and cons to each. Flipping a house is a way to get a quicker return on your investment, but you likely pay more in taxes if you aren't renting it. Renting a home brings you passive income, but do you want to take care of broken toilet at 2am? If not, you will want to hire a property manager or consider flipping a home.
2. Get A Mentor: Whether it's an experienced real estate agent that knows real estate investing or another real estate investor, make sure you listen to the advice of those who have gone through the experience. Choose a lender that can walk you through the pros and cons of real estate investing and choosing the right loan for you, and the type of home that supports that loan.
3. Location Location Location!: I cannot stress enough how important location is when choosing your investment property. Look at the resale values of those homes that have sold around your investment property to confirm it's a good rental location or a solid spot to resell the home for a profit.
4. Keep Track: Keep track of all of your receipts of materials and contractors so you can deduct those from the profits for your taxes at the end of the year. If you decide to rent the property, make sure you research what a 1031 exchange is when you start looking selling it, you can possibly save huge on your taxes.
One of the biggest challenges right now for investors is the lack of homes available on the market today, let alone a "deal" on a home. If you can find a great investment property, it's a wonderful way to invest your money if you choose the right location and listen to the advice of an experienced realtor or mentor.