Here are some tips for investing in housing. With the recent problems in the economy, particularly in real estate, an investor may be able to purchase homes, rental properties, and other real estate at prices far below what they will be worth in future years. However, investors should use care and common sense to assure they are getting a deal and here are some tips to help.
Hunt for Bargains
Money is made at purchase with housing, like any other investment. Investors who are considering investing in housing need to learn about real estate market in their area (or the area where they are looking to buy property). Once a determination has been made to the property values and desired locations, investors need to have patience and wait for a deal.
Living in the Investment
One tactic that might work for some investors is to buy a property that has dramatically gone down in value and live in it. The home can be properly cared for and the investor may reduce the amount of taxes the sale will generate by making it a primary residence for a few years.
Learn to Work on Homes
An investor who is able to work on homes that need work can further increase their profits by buying homes that need work and completing it themselves. If the home is to be lived in by the investor for a few years this is a even better way to maximize profits on the right property.
The Emergency Fund
Homes and other housing properties can quickly turn into a financial mess without cash savings. Buying a home that may later need sudden major repairs is something that an investor should expect. Being prepared to deal with these problems and avoiding borrowing money can help an investor avoid eating into the property’s profit potential.
Build a Network
Investors in housing or other eral estate should build an informal network of contacts that can be useful in helping to find properties, deal with purchase and sales, and maintain the investments. Having a relationship with a trusted real estate agent, attorney, carpenter, plumber, electrician, and others can help the housing investment process go smoothly. Investors can look to their circle of friends as well as social organizations to help build these contacts.
Invest in REITs
Many Real Estate Investment Trusts are down in share value from their highs of a few years ago and the popularity of REITs with investors is down as well. However, many REITs should be well positioned to profit when the market rebounds. And owning shares in a REIT is a much simpler process than owning real estate.