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Two Ways to Invest in Luxury Real Estate in Dallas (2019 Update)

Luxury real estate is an incredibly lucrative market, and it provides some very interesting and attractive investment opportunities. If you’re able to find a good investment opportunity, you can take advantage of this market and see nearly instant returns on your investment. But how can you break into luxury real estate investment?

Even investors who do not have massive amounts of liquid capital can do this with one of these two methods. You can invest in luxury real estate through savvy foreclosure purchases or by joining one of the real estate investment groups here in Dallas.

Luxury Foreclosures

Luxury rentals are incredibly popular amongst wealthy people who maintain residences in different places throughout the year. Instead of purchasing a summer home in the Hamptons and a winter home in Dallas, more and more people are renting luxury homes and condos when they are in town.

As a result, smart investors can make a great deal of profit when they find luxury foreclosures in attractive neighborhoods around Dallas. To do this properly, though, you will need to talk with luxury real estate agents in Dallas to ensure that you’ve found a good deal on a property that will yield a profitable rental rate.

Once you’ve found a property that you feel has potential, you’ll also want to discuss your options with your luxury real estate agents in Dallas, as well. What are the trends in the market looking like? Will you be able to sell the property for a profit in a few years? How long should you hold onto it? Whom should you be renting to? How much will it cost to renovate, and what upgrades will you need to do to make it a viable rental? The right agent will help you answer these questions to determine whether or not you’ve found a good deal.

Real Estate Investment Groups

On the other hand, what if you want to invest in a luxury property, but you don’t have the liquid capital to purchase one by yourself? Real estate investment groups give investors more options by letting them pool their capital together to buy a large, luxury property.

In this case, you would only own a portion of a multi-million dollar property. However, you would see a very large return on your investment almost immediately. Furthermore, you wouldn’t have to do any of the work, find the contractors, or enter a bidding war on a foreclosure. It’s a truly hands-free way to invest in real estate in Dallas.

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What is the Best Real Estate Investment in Dallas? (2019 Update)

New investors hear a lot of conflicting opinions about the best real estate investment opportunities available to them. Some experts maintain that house flipping is the only viable option, while others extol the many benefits of turnkey properties. Who is right? Well, they both are.

Joining a trust or real estate company to purchase a portion of a commercial real estate for lease can be very lucrative. By the same token, purchasing residential properties and “flipping” them quickly after making any necessary repairs and renovations can also be very profitable. Choosing the best real estate investment depends a great deal on your personal goals for your investment.

“Fix and Flip”

If you are a very hands-on person, and you want to turn real estate investment into your full-time job, the “fix and flip” model may be the avenue for you. Investors who choose this method spend their time researching short sales, foreclosures, and REO (real estate owned) properties. They then purchase them at discounted rates and spend time and money to renovate them before selling them at market value for a profit.

If you are simply attempting to diversify and stabilize your portfolio and you are not in the market for a new career, this is not the right real estate investment for you.

Turning Foreclosures into Rental Properties

If you want to invest individually in foreclosure residential or commercial real estate for lease, you will likely need to invest some time and effort into finding the right property and renovating it. However, you do not necessarily have to play the part of landlord. Beyond renovations, once you find a trustworthy and affordable property management company, you may turn over regular maintenance and care of the property to them.

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What Can Real Estate Investment Groups in Dallas Do for You? (2019 Update)

If you’re thinking about diversifying and stabilizing your investment portfolio with real estate in Dallas, you’re on the right track. However, as an investor, you’re going to be purchasing real estate for very different reasons than a couple purchasing a home to raise a family or a business owner purchasing a retail space.

A lot of first-time real estate investors think that they have to become landlords to see returns on their investments. Thus, they purchase properties with the intention of renting them out, not fully grasping the time commitment they’ve just signed up for. However, this is really not the only way to invest in real estate in Dallas, and it’s really not even the best way for most people.

If you’re not prepared to be a full-time landlord, to find a qualified property manager or property management company, to interview and perform background checks on tenants, and to take on the 24-hour responsibilities of being a landlord, then you should really consider getting involved with one of the real estate investment groups in Dallas.

Real estate investment groups in Dallas are a lot like mutual funds, but for real estate investors. The members of an investment group pool their investment money to purchase a property (or properties) that the members could not otherwise afford individually.

In most cases, a real estate investment company will make the initial purchase, and members can join by investing in the company. The property or properties you invest in through an investment group will most likely be turnkey rentals, with everything taken care of for you. You’ll never have to concern yourself with calls at midnight about leaking faucets or collapsed roofs. Instead, as your group’s property gains tenants and builds a profit, you’ll see returns on your investment.

This kind of investment also comes with the added benefit that you won’t have to differentiate between cash flow and ROI on a property. That’s a balance that landlords often have to keep and that often gets them in trouble when they don’t put enough money aside for repairs and/or maintenance. All in all, as a busy investor with other business to attend to, you probably don’t want to be a full-time landlord, so an investment group is most likely the best choice for your real estate investments.

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Tips for Supplementing Your Income by Investing in Rental Properties in Dallas (2019 Update)

When it comes to investment properties, you need to look at both long-term and the short-term returns. Eventually, you would like to be able to sell the property at a profit. However, you don’t want all of the money you’re investing now to be tied up in the property for the foreseeable future. Furthermore, you don’t want to lose money to interest rates, either. That’s why investing in rental properties in Dallas is a great idea.

However, there’s a little bit more to income property in Dallas (or anywhere else in Texas or the rest of the United States) than just making a purchase, getting some tenants, and collecting rent. If you’re investing in rental properties in Dallas, look for these three factors. They’ll help point you to the right investment for your budget, your time, and your goals.

It’s Not a Risky Investment

We’ve all heard of high-risk, high-reward investments. They may have their place, but it’s not in real estate. Real estate investments should be chosen for their stability and long-term ROIs. Purchasing property in a transitional area, for example, can be a great move, but only if you’ve seen enough evidence that the transition is occurring and that the building in question is going to flourish in the coming years. When it comes to real estate, choose the safer bet almost every time.

It Has Long-Term Tenants

When looking for income property in Dallas, you may want to consider commercial properties or purchasing through an investment group. Why? Because the leases on commercial properties tend to be longer than those on rental properties. Whereas the leases for an apartment building are usually renewed annually, the leases on a retail building will last, on average three to five years. That’s a lot more stable income for your investment.

It’s Not a Huge Time Investment

Finally – another reason to consider an investment group or other turnkey property – don’t choose a property that will take up a lot of your time and energy. This is a guaranteed loss for your investment. Imagine all of the other profitable investments and ventures you could be making while you waste time handling property management issues.

If a property meets all of these requirements, it may still not be the right property for your investment, but it definitely deserves further consideration. If it fails to meet any of them, though, move on to the next and continue your search for the best return on your investment.