Investing in real estate can be a wonderful decision, but one that requires dedication, planning, and a lot of saving. Those who invest in real estate can see incredible returns and it can be significant when adding to your investment portfolio. Historically speaking, this is a great time to start investing in real estate because it’s a very healthy market. Home prices are up nationwide about 5.7% in June 2016 according to CoreLogic and homes are in high demand.
If you find the right property in the right location and you have enough cash reserves to make it a go, investing in real estate can be a great option. Here are some reasons why investing in real estate is a great idea:
Financing options for investors have expanded. There are a variety of financing options that have been made available to investors nowadays, which makes it a lot easier to invest in real estate. For example, lenders can underwrite a loan based on the income of the property rather than investors being tied to their personal income. In addition, there is an FHA program called the 203K loan that allows you to incorporate the needed repairs of a property into the loan that you’re taking out and still only pay a 3.5% down payment. You can use this on multi-family properties and create a plan that allows you to fix up a home and use it for rental income in the future.
It’s a great way to diversify your investment portfolio. Investing in stocks and bonds is a good idea, but creating a diversified portfolio is something that’s recommended by financial planners around the country. Luba Nikulina, global head manager of research at Willis Towers Watson, shares that there has been a shift away from equities and bonds into other investment alternatives, which has helped create diversification and ultimately, successfully manage risk.
You’re the boss. With every real estate investment you make, you’re the person in charge. You’re able to make improvements needed, refinance your mortgage if needed, raise rents, find tenants, and market your property how you want. When you invest in another company, you’re putting your faith in how they manage it. With real estate, you can be in control of your money while having a tangible asset that can yield a cash return.
There is so much potential in real estate investment, but it requires you to do your research and make careful decisions. If you’re looking at the pros and cons of investing in real estate, contact our brokerage team today at Zenith Properties for specific information.