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Richmond Real Estate Investment 101
It could be a good time to invest in Richmond real estate or other area markets, given the amount of foreclosures and other distressed properties with reduced prices. It could also be a bad time to invest in real estate, if you don’t know what you are doing. That is the key. It’s a good time to invest, but it is difficult.
Now when you go out to invest you are competing with plenty of other offers. The investors are back. Just like buying a home to live in, taking the real estate investment plunge requires taking stock of your financial goals, planning and lifestyle before taking the plunge. Pretty much like buying any property. If you’ve got the time, the money and the lifestyle that lends itself to managing a real estate investment, you are just about half way there. However, both halves are pretty big halves. The National Real Estate Investors Association says you’ve still got a lot of work to do. Here’s how much….
Buy your own home first- The general rule of thumb is that buying your own home will not only put a roof over your head, but also background you in the full experience of buying and owning property — financials, market conditions, maintenance and real estate professionals you’ll need along the way. What’s more, your first home could later become your first investment property, a property in a market with which you are familiar.
Go back to school- Turn to the Internet, reputable books, successful investment groups, college and university level courses, even your Virginia’s real estate license program. You don’t have to actually get a license, but you can become just as educated as a licensed agent. Individual real estate investors, salespeople and others who you’ve met on the way to investing are also valuable educational resources.
Get professional help- The same way you find any competent, trustworthy and honest professional is the same way to look for a mentor, investment partner with prior knowledge or investment group. Seek referrals from friends, family, professionals with whom you already conduct business, co-workers and others you trust who’ve had a satisfactory, successful real estate investing experience. Now, more than ever, you need the experience of a REALTOR® like Skye Bruce Properties to guide you through the process.
Learn your investment market- One market’s bubble could be one investor’s boom and another investor’s bust. A home in the Outer Banks could give you vacation rental income in a half year sufficient to cover the cost of principal, interest, taxes, insurance, home owner association dues, upkeep and other costs, but still not appreciate. A duplex in Richmond’s Fan District may not bring you sufficient rent in a year’s time to cover the cost of owning the property, but might appreciate more than enough to make up for your carrying costs over the long term.
The variables are endless and you’ll need to measure your capacity for risk against market conditions.
Exit strategy- Finally, while some experts say you’ll also need to develop an exit strategy in terms of unloading properties when they are no longer viable investments you might also be well served to have a strategy to sell once you have reached a certain return level on your investment. Think of all the investors who would have made a healthy profit if they had sold 2 years ago yet they held on to make more and more.
Considering buying an investment property? — Contact Skye Bruce Properties today for our FREE and HELPFUL Real Estate Investment Property Consultation and to learn about potential investment properties throughout the Richmond area.
