HOW TO MAKE HOME INVESTMENTS
Investments Worth Making
Judith Sutton, ABR CRS IDS PMN ASP IAHSP SRES GREEN AHWD
908 803 0472
Tips for Real Estate Investment from Women
Invited guest post by Julie Pedersen, Public Relations Specialist, Coldwell Banker Real Estate LLC
Women have been outpacing men in single homeownership since 1980, according to annual buyer profiles compiled by the National Association of REALTORS®. Therefore, it should come as no surprise that in a dominantly female profession, many Coldwell Banker-affiliated agents are also investors of real estate and have shared their experiences with buyers.
Here are 7 tips and sage advice from women, in particular, affiliated with Coldwell Banker…
1. Determine the type of property- Find rental properties or houses to flip to build your wealth. However, in some areas, you might consider purchasing a vacation home or a property that you can also use as an Airbnb. “For example, condos that are located near a hospital are often rented as an Airbnb to families who need a rental for a month or more while a family member is undergoing treatments.”
2. Location, location, location – Also, the importance of location is the most important factor in determining your return on investment. As with any home purchase, do your homework to find the area that will best fit your needs and situation. If you want to use your property as a vacation rental or an Airbnb during part of the year, look for properties with low monthly fees, close to transportation or near facilities and cities that draw visitors on a regular basis. Ultimately, the goal is to invest in properties that will most likely increase in value or provide more income over time.
3. Evaluate the full cost up front – Build your portfolio and evaluate and analyze the full cost of the rental property, including the cash flow. As a rule of thumb, the property should fully sustain itself and not negatively impact your personal household budget. In the long run, you want each investment to add to your household’s discretionary fund and savings account.
4. Understand down payment- If you are looking to purchase a property specifically as an investment (and not reside in it), then you need to make a down payment of at least 25% on the home. A first-time investor might consider putting down less and purchasing a two-unit home in which you can rent one portion and live in the other portion. This is a good way to get started in homeownership and real estate investing – your tenants help cover the mortgage cost and you can continue to set aside capital to seek another investment while getting a tax write-off on a property that you live in.
5. Have a contingency fund – Have an emergency fund or reserve for each investment property in your portfolio. There will always be repairs and on-going maintenance for the investment property and it’s best to prepare in advance for those items. Make sure to account for things such as basic upkeep, potential upgrades over time, utilities, insurance and taxes.
6. Consider property management – It’s important to have a list of contacts at the ready to reach out to for maintenance such as: plumbing, electrical, contractors and handymen. Some people are hesitant about owning rental properties because they don’t want to potentially deal with tenant issues, but employing a professional property manager can oversee the unit(s) and the money spent is well worth the cost. If you decide to hire a professional, make sure the cost is factored into your budget.
7. Be selective – Consider investing in rentals that are near your home to be close to the tenants to help them out at a moment’s notice, if necessary. Buy properties that you personally like and would be willing to live in. The bottom line is that you are helping people and maintaining a good relationship with your tenants – Win! Win!
“Real estate investing is a great way to retire early or simply create extra income. It is not an easy undertaking and challenges are inevitable. To be a successful real estate investor, it takes patience, determination and resiliency…and men, you can join in with all of this great advice too!
Are you ready to consider an investment? Call me and we can discuss the possibilities…your trusted advisor, Judy
"...the right relationship means everything..."
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