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What It Means to Invest in Luxury Real Estate? (2019 Update)

There’s no doubt about it – luxury is in. In the past five years alone, flipping of luxury homes – those valued at a million dollars or more – has increased nearly 40% nationwide. You may not have considered this avenue for drastically increasing the value of your investment portfolio, but it’s a valid option for investors with the financial backbone to support the purchase.

While the largest markets for this type of venture are obviously locations like Beverly Hills, the Hamptons, San Francisco, and Manhattan, luxury homes in Dallas are also a lucrative opportunity to increase your cash flow and net worth. In fact, Dallas ranks among the top 10 cities in the United States when it comes to the number of wealthy residences.

What Sets Luxury Apart?

Luxury homes in Dallas aren’t much different from other investment houses, except that all of the amenities that residents normally want and expect are ramped up to new heights. These homes are defined not only by their interiors – lavish fixtures and finishes, custom architectural details, features like swimming pools and generous outdoor living spaces – but also by their surroundings. In addition to top notch security and privacy, there should also be high-end dining, shopping, and cultural experiences available nearby. And, these luxury homes in Dallas are large – typically several thousand square feet.

Now is the ideal time to take the plunge into high-end investment houses. While the market has recovered significantly from the crash in the late 2000s, prices are still reasonable. At the same time, consumers are getting more comfortable with spending on housing, encouraged by the decreasing unemployment rate.

One challenge that you may encounter is finding out which luxury homes in Dallas are for sale. Affluent owners typically try to keep a low profile when it comes to their real estate activity, so it can be difficult to pin down whether a property is even on the market. In addition, financing for luxury homes in Dallas usually takes longer than for a typical mortgage, so sellers may not even show the house to buyers unless they are already qualified.

Connecting with professionals in the area who know the market can open up opportunities you might not be able to access on your own. These resources could come in the form of real estate agents who specialize in the luxury market, or real estate investment groups with industry connections.

If you’re interested in investment houses or luxury homes in Dallas, it’s a good idea to have your financials in order, contact those in the business who may be able to assist you in your search, and be prepared to have patience as you wait for the right luxury investment property to come along.

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5 Tips to Improve Your First Real Estate Investment (2019 Update)

A lot of new real estate investors lack confidence in their decision-making skills, especially when it comes to their first investment properties. They are afraid to spend too much on renovations, and they shy away from making some of the most effective improvements to get more out of their properties. If you’ve acquired an income property, and you want to increase your rental rates, decrease tenant turnover, and generally improve the value of your property or properties, follow these five tips.

A Fresh Coat of Paint

You might be surprised at just how effective a fresh coat of paint can be for improving the value of your investment. You can buy a bucket of paint for between $20 and $30, and you won’t spend much more on brushes, rollers, tape, plastic sheets, and any other materials you need. Then, if you do the work yourself, you’ll have made a major improvement to your property’s value without taking up a lot of your liquid capital.

New Carpeting

When you walk into a house, you immediately notice if it has new, plush carpeting or if the carpets are starting to look and feel a little threadbare. Carpeting doesn’t cost a lot of money, and it can make your property look a lot better to your prospective tenants.

Bathroom and Kitchen Renovations

If you’re investing in a turnkey property, you won’t have to worry about this for at least the first few years. If, however, you’ve invested in an older or distressed property, you should have already allocated some funds for renovations. The kitchen and bathrooms (especially the master bath) are some of the best places in the house to spend your renovation budget. People spend time a lot of time in their kitchens, and they want to relax and recharge when they’re taking a shower or getting ready to go out on the town. That’s why kitchens and baths sell houses, and it is why quality tenants always opt for houses with updated kitchens and bathrooms.

Landscaping

If you’re looking for DIY improvements that won’t cost much, landscaping is a great place to start, as well. You don’t have to be a master gardener to add some attractive flowers and shrubberies around the front porch, along the front walk, and/or around the mailbox. And, if your lawn is looking patchy, you can spread some grass seed to fill it in and make it more attractive, too.

New Windows

A lot of new investment property owners leave the windows alone because replacing them can be somewhat expensive. However, with the improved energy efficiency and aesthetics of new windows, you can add upwards of $10,000 to the value of the house. Plus, they’re a huge selling point with tenants and future buyers because they improve the energy efficiency of the house and can result in much lower utility bills every month.

These improvements won’t be free, but you can make them more cost efficient by doing most of the work yourself. Window replacements and kitchen renovations may be jobs for the professionals, but even with these you can save some money by taking care of smaller jobs yourself, such as demolition and/or small fixture installations.

With these five tips, you can create a budget solution that will improve the value of your real estate investment so that you can get higher rental rates while reducing tenant turnover. Thus, you’ll have shorter vacancies and much more stable income form the property. A little bit of expense now could pay you back in a big way down the road.

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5 Lessons You Can Learn From Failed Real Estate Investments (2019 Update)

Whether you are new to the real estate investing world or you have been investing for some time, you should understand that failure can hold a number of valuable lessons. That doesn’t mean that you have to go through the trials of a failed investment to learn those lessons, though. Fortunately for you, many investors have come before you and learned those lessons the hard way so that you can learn from their mistakes and avoid them.

Stick to What You Know

If you are new to real estate investing, it pays to do some research and to familiarize yourself with the markets you’ll be investing in before you dive in. As you do this, you’ll start to find that you’re more interested in and more comfortable with certain types of investments over others. This doesn’t mean that – if your first investment was in medical real estate – that every investment you make in the future has to be in the medical field. However, it does mean that you should understand your strong points and find financial and real estate experts who can help you make informed decisions about your investments in the future.

If It Sounds Too Good to Be True, It Probably Is

You’ll see infomercials, paid seminars, books, and TV shows all promising that they have the key to help you make millions of dollars in no time at all with real estate investing. If their promises were true, you would see a lot more millionaire real estate investors walking around, wouldn’t you?

The fact is there is no single secret to getting rich with real estate investing. However, with the right financial advice and real estate investing opportunities, you can grow your wealth while diversifying and stabilizing your investment portfolio.

Following a Formula Doesn’t Guarantee Success

Some of the books, websites, and television shows you see out there will have some good advice. If you follow this advice and you find a great deal in the right market, you’ll likely see a positive ROI. However, simply following one of these formulas will not guarantee that you get positive returns on an investment. That’s why it’s much more important to have experts in your corner than it is to understand any particular real estate investing “guru’s” formula.

Overpaying for Properties Is Always a Bad Idea

Whether you find yourself in a bidding war at an auction or someone tries to convince you that you should pay an inflated price on shares in an REIT that are “sure to appreciate”, you’re looking at a bad deal. Overpaying for a single-family property will result in losing your profit margin when you sell or rent. And overpaying for equity is just as disastrous, if not more so.

Never Bank on Appreciation – Cash Flow Is Essential

Finally, if you are looking at an investment property based on its potential appreciation rather than its current value in monthly or quarterly cash flow, you should probably walk away. Unless a property can bring you regular cash flow starting immediately or in the very near future, you are looking at an investment that will only tie your funds up and will not show you any significant returns until you can sell it. Even then, market values are never guaranteed, and you may end up taking a loss on the property in the long run.

Take these lessons and learn from real estate investors who’ve come before you. Many people have lost significant amounts of money by making very simple, understandable mistakes like these. Learn from those mistakes and enjoy more returns on your investments now and in the future.