Investing in Real Estate > Info for Investors

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Congratulations! You're thinking about investing in real estate.  Here is a collection of articles and videos that will help you make an informed decision.  

The Portrait of a Typical Investment Property

(It may be different than you think!)

When it comes to real estate investing, there are a lot of misconceptions, especially where investment properties are concerned. Too often, real estate investments are associated with one of two extremes: run-down properties to be rehabbed and resold or exclusive, resort-like vacation properties.

While some do invest in properties like these, the portrait of the typical real estate investment property is much different. The following are a few statistics that represent average investment properties:

• 75% of investment properties are in small towns and rural or suburban areas
• 48% of investment properties are within 20 miles of the investor's primary residence
• 57% of investment properties are single-family, detached homes
• 92% are not resort properties

As you can see, the average investment property is a single-family home purchased near the investor’s primary residence. The reality is, there are properties with great investment potential in nearly every market. You simply need to know what to look for when searching for properties.

For most real estate investors, the primary consideration should be a property’s ability to generate monthly cash flow, or the amount of income (in the form of rent payments) remaining after expenses and mortgage are paid. By investing for cash flow, a property will earn money every month, even when not appreciating. This ensures your investment will continue to be stable and lucrative. 

Earning cash flow on a property has many benefits that you simply don’t find in other investment options: you maintain control over how the cash is used, you can increase cash flow by cutting expenses or raising rent, and you earn consistent and secure income month over month, to name a few. 

If you’re considering investing in real estate, begin by thinking about your preferred investment areas. Focus on areas near you that you’re familiar with and that have home prices within your budget. Once you’ve narrowed it down, contact a real estate agent who specializes in working with investors, such as a Certified Investor Agent Specialist (CIAS).

A CIAS designated agent has the skills and knowledge to assess properties based on your specific needs and wants. He or she can provide you with an analysis of a property’s cash flow potential and guide you through the entire investment process.

Discover Your Real Estate Investor Profile

Seasoned real estate investors will usually have a clear understanding of the investment criteria they want. They know what their goals are, they understand the types of properties they need to focus on, and they know their financial limitations. For newer investors, however, these questions might be harder to answer if only because they don’t know where to start.

There are 5 basic types of investors. Understanding which group you fall into is the key to determining which direction your real estate investment strategy should head. The following is a list of the 5 investor types and the criteria they’ll best respond to when it comes to real estate investment.

1.  The First-Time Investor

The First-Time Investor is often surprised to find how simple real estate investing is and is sometimes hesitant to jump in. To alleviate these concerns, First-Time Investors should concentrate on properties that need less work and are in more desirable areas in order to eliminate some of the variables.

2. The Move-Up Investor

An increasingly common investor type, Move-Up Investors are those who upgrade their primary residence. Instead of selling their current home, however, they keep it, rent it out and generate cash flow. Move-Up Investors have the benefit of intimate knowledge of their investment property.

3. Portfolio Investor

Portfolio Investors own one or more investment properties and are interested in expanding their investment reach. For the Portfolio Investor, many of the mechanics of real estate investing are no longer foreign, making it easier to find other opportunities. The Portfolio Investor will begin to consider properties beyond the single-family home.

4. Performance Investor

Chances are, Performance Investors have a high level of comfort with the investment process and may also have a higher net worth. They are able to use their net worth to buy a wider variety of properties including those in the luxury, resort and commercial portions of the market. Performance Investors are also in a good position to leverage their assets and grow their wealth quickly.

5. The Rehab & Resell Investor

Sometimes called flippers, Rehab & Resell Investors like getting their hands dirty and making quick but substantial improvements to properties that may have fallen into disrepair. The risk can sometimes be a little higher in this type of investing as the properties are not always in good shape, but the reward can be high as well.

As someone with the Certified Investor Agent Specialist designation, I can help you determine your investor type, explore opportunities for investment in the market, and equip you with the knowledge and resources you need to build wealth. Please contact me today to get the process started!