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What to Consider Before Investing in Real Estate? (2019 Update)

There are many experts out there telling us that right now is the best time to buy real estate. Interest rates are down, real estate development is up in many areas, and banks are lending again after the economy has started to bounce back. But just because this is a good time for investing doesn’t mean it’s the right time for you specifically.

When choosing the best time to invest in real estate, you should always consider a few key factors first to be sure that your ability to invest lines up with the market’s health for the best possible investment opportunity.

1. Stability

Much like starting a romantic relationship, both you and the real estate market need to be stable for an investment to work.

For you: How stable is your income? If you invest your savings right now, do you have a back up plan in place if you lose your job tomorrow? Being forced to rush a sale to get out from under an investment so that you have the cash won’t allow you to wait for the perfect opportunity to optimize your ROI. If you aren’t sure that you’ll be able to support yourself and pay the mortgage on your new investment (or pay for remodeling or whatever other costs you’ll have) for at least the next six months, you may want to think again about investing.

For the market: Are real estate experts mostly in agreement about the health of the market? Have there been any recent changes in legislation or interest rates that haven’t settled yet? Be sure that the market is stable as well so that you don’t find yourself stuck with an upside-down investment.

2. What is Your Goal?

Before you invest in a property, be sure that you consider what your goal is for the property. While you probably have an overall goal with your investing already in mind (such as “create a retirement fund”, or “quit my job in 5 years”), each specific investment should also have its own goal. Do you want to live in this house while you finish out your 5 years with your current job? Do you want to rent this house to start making some extra cash and grow your portfolio? Don’t simply buy a property just because it’s a sound investment on paper. Consider what you’ll do with it while it’s on the market.

3. What Does the Research Say?

Every single real estate investment article you read will tell you to do your research. Knowing the property and the area is vital to making a good investment. The reason that this consideration is so often mentioned is that it’s easy to get swept away by the description written by a real estate agent. Guess what? They want to sell the property! Their descriptions are designed to draw you in and make you want to spend money.

Before you buy, consider what the research says about the value of the property, and about the future of the area. Is it a place where a person could live for a decade? Could they raise a family there? Could an elderly couple enjoy their retirement years there? Consider every possible demographic, and really picture if they could find happiness in this property and in this area.

Be Patient

Real estate investing seems like a high pressure investment. Competitors are everywhere, and interest rates are always fluctuating. It’s tempting to go with your gut. The most successful real estate investors are those who have learned patience. As you do your research, consider your stability and the market’s, and define your goal for the property, you’ll be able to trust that you’ve made a great decision. If a property is bought while you are still deliberating, consider it a dodged mistake, and move on to the next one. The great thing about real estate is that there is always another house for sale.

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How Much Capital Do You Need to Invest in Real Estate? (2019 Update)

Have you ever wanted to invest in something a little more tangible than stocks, but you weren’t sure if you really had the money for real estate? There is a lot of misinformation about real estate investing and how much capital you actually need to become an investor. You may be surprised at the numbers that it actually takes to invest in real estate, and how easy it can be to get started, even if you don’t have all the capital you need just yet.

First, the Numbers

Most of the time, aspiring investors will hear anything from $5,000 to $50,000 being quoted as the opening range for investing in real estate. The truth is that the amount you need depends totally on what type of investing you are starting out with, and while you could need more than $50,000 if you’re choosing to go into solo commercial real estate investing, for example, you could also need less than $5,000 to start out with in certain models.

So the truth is: there’s no specific number for getting started in real estate investing. But if you want a basic goal to begin saving towards, $5,000 is a good number for several different types of real estate investing.

Affordable Investment Options

The cheapest way to get started in real estate investment is either to go through an REIT, or to go through a crowdfunding platform.

An REIT is basically a commercial real estate market that allows investors to trade on real estate stocks, but also involves some direct mortgage investment. This type of investment is highly liquid, and is great for those who have experience with stocks because it offers a familiar structure. Getting into the asset class of REITs can take as little as $500. If you have $2,500 in an investment savings account, you would be able to do some enthusiastic trading in an REIT.

Crowdfunding is a new, but growing, method of investing in real estate. Instead of relying on just a few investors with large sums of capital, dozens or hundreds of investors with smaller investment amounts can join together to fund an investment. The average crowdfunding real estate investment options start either around $500 or $5,000 per investor.

The Next Rung

If you’re able to do a little more than $5,000 to start, there are some middle-of-the-road options that can allow you to see higher returns, but without requiring six-figure investments. The most common method in this group is utilizing an investment group or a private partnership.

An investment group is a professional group of real estate investors sponsored by a company. The group makes decisions on what type of investments they want to purchase, and the company performs all the day-to-day tasks and paperwork. As an investor, you’d need between $5,000 and $50,000 to become part of an investment group in most cases.

A private partnership, on the other hand, is a private agreement between yourself and one or more other investors. You’ll split the cost of an investment, and assign the paperwork and day-to-day duties of managing the investment among yourselves. This is a great way to pool money with other beginner investors; if you can invite a more experienced investor into the fold, you’ll also get a great education on how to grow your real estate investments.

In the Future

Once you’re able to dedicate more than $50,000 to your real estate investment fund, you’re ready to consider solo investing. Now is the time when you can purchase properties on your own, to become a landlord or to flip. This is the riskiest type of real estate investment, but also the most rewarding.

Starting out with an REIT, investment groups, crowdfunding opportunities, and partnerships allows you to learn the ropes without risking a significant chunk of money right off the bat. Sometimes as little as $50 is enough to get you started as an investor!

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Is Now a Good Time to Invest in Real Estate? (2019 Update)

While most young adults and new families struggle to even create a savings account, much less consider investing for the future, now is one of the best times in recent history to make investing a priority.

The fact is that investing is what moves a person or family from one income level to the next. Getting raises or second jobs only creates more opportunities for spending; investing is what builds permanent wealth. And one of the most common types of investments is real estate.

But after so many millennials grew up or came of age during the housing market crash in the 2000s, it’s easy to see why the current generation of young investors would be hesitant to put money into real estate. However, the real estate market has finally bounced back, and many investment experts believe that the current year is the best time to buy real estate.

Interest Rates

The first reason that this year is the best time to invest in real estate is that interest rates are still very low. It’s an interesting fact, because before 2016, interest rates were actually climbing, and most analysts predicted a hike in rates. That doesn’t mean that they’ll continue to drop, however. Experts agree that the rates will start climbing again very soon. This is the year to get in on real estate before those go right back up.

The Perfect Storm of Affordable Urban Growth

A decade ago if you wanted to invest in real estate, you looked in New York City, San Francisco, or other major cities such as those. But the prices in those areas have climbed to astronomical rates that many new investors could never afford on their own – and could certainly never make a profit on.

But there’s a perfect storm brewing in up-and-coming cities such as Dallas, Houston, Raleigh-Durham, and Berkley. These places aren’t historically real estate stars. But thanks to sudden growth in the business sectors of these cities, real estate construction has picked up – and yet these areas are still priced much lower, based on the historic housing prices of what were once less populous areas. Now is the time to take advantage of these low-priced homes and commercial buildings before the prices catch up with the growth.

You Can Invest from Your Home

Thanks to the wonders of the Internet, you don’t even have to leave your home to invest in real estate. In fact, through crowdfunding platforms, mobile apps, and tons of investing websites, you have more options for real estate investing than ever before. You can research properties all over the world, take advantage of market growth in other areas, and send and receive payments for investments from your phone if you wanted to.

Crowdfunding especially has changed the way that many real estate investors are interacting with potential properties. Because it requires a smaller investment amount, and gives investors the chance to diversify with many investment opportunities, crowdfunding real estates platforms have grown exponentially over the last year.

The Year of Free Knowledge

Finally, the last reason that this is the best year to invest in real estate is that knowledge is totally free. It used to be that real estate was hidden behind expensive courses and a country-club mentality. These days, researching a property, or an investment opportunity, is as easy as sending a text message.

There are thousands of websites, blogs, eBooks, forums, podcasts, and many other free educational sources online that can be accessed at any time. Have a question about a new type of real estate investment? You can easily shoot an expert real estate blogger an email, or connect with other investors through a forum or a social media website.

For all of these reasons, real estate has never been a more attractive investment. As more young adults and families start focusing on creating a stable future through investments, real estate should always be at the top of the list.

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Types of Commercial Real Estate Investments (2019 Update)

When you think of commercial real estate investments, what comes to mind? For most people, commercial real estate is synonymous with retail or office space, but while these are definitely types of commercial real estate that offer potentially lucrative investment opportunities, they aren’t the only types available to you as an investor.

Multi-Family Housing

One great way to invest in commercial real estate is by investing in multi-family housing, such as a condo or apartment building. Most investors are not in a place financially to purchase an entire building or complex, but many of these properties are owned by trusts or investment clubs, making it much easier for investors to participate.

Multi-Family Housing

If you’re interested in this type of commercial real estate investment, you could pool your investment capital with others’ capital via an REIT (real estate investment trust) or another investing group or club. Essentially, instead of owning the property itself, you’ll own equity or shares in the property, and you’ll receive quarterly or monthly returns on the property’s profits based on your percentage.

Medical Real Estate

Medical real estate is another type of commercial real estate that is often available through real estate investing groups and trusts. This type of real estate can include any property that is designed and built out for the medical industry. Some popular medical real estate properties are hospitals, senior care centers, specialists’ clinics, general practices, and urgent care clinics.

The appeal of medical real estate is that it is always in demand. With people living longer than ever, geriatric care is a growing field, and with the enactment of the Affordable Care Act, more people than ever before have health insurance and are seeking medical care. As a result, more and more medical real estate properties are being built, but the supply has not come close to meeting the demand in most markets.

Retail Shopping Centers

Finally, we mentioned retail spaces earlier, but let’s go into a bit more detail. Retail shopping centers generally have multiple rental units, which can have a great stabilizing effect on your investment. If you invest in a property with multiple tenants, you will likely still see quarterly returns, even if one or more tenants leave and you go a few weeks or months between tenants in that space.

Furthermore, retail properties tend to have longer leases than residential properties, which means that you’ll have more stability in your income from a commercial property like this. If one of your tenants is a large corporate store, it’s not unusual for them to sign a long-term lease of 15 to 20 years.

These are only a few of the many types of commercial real estate investments you may want to consider to diversify and stabilize your portfolio. Consider them and other commercial properties before you commit to your next investment.

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Single-Family Rental Properties in Dallas Provide Investment Opportunities (2019 Update)

If you’re looking for lucrative ways to increase your wealth and diversify your investment portfolio, then real estate is a fantastic choice. Of course, as you begin doing your research on this type of investment, you’re going to find a lot of information on single-family homes and how to invest in them. If wondering whether or not single-family houses for rent in Dallas are the way to go for your portfolio, consider a few factors that might contribute to your decision.

Dallas Has a Very Lucrative Rental Market

First of all, perhaps because it’s a growing economic hub, there’s a huge demand for single-family rental properties in Dallas. Basically, every year, corporations headquartered in Dallas recruit new talent from all over the country (and all over the world). These people relocate to Dallas temporarily or permanently, and they need places to live in the first few months or years of their stay.

Essentially, most people moving to the Dallas-Fort Worth area are not going to want to buy a house before they get a chance to get to know the area and where they want to live. As a result, these new residents are looking for good rental properties, and single-family houses for rent in Dallas are a great opportunity for them.

More Millennials Aren’t Buying Houses

At the same time, we’re seeing a continued increase in the demand for single-family houses for rent in Dallas because younger professionals who would traditionally be in the market to purchase their first homes are waiting longer and continuing to rent instead.

Perhaps because they’ve come of age in the aftermath of the housing crisis of 2008, millennial adults are less likely to buy than rent. This could also be due to the fact that many of these young professionals expect to move for work several times before settling down (if they ever truly settle down). They don’t want to be locked into selling a house before they can move to their new job or take off on their next great adventure, and so they’re more interested in renting instead of owning.

Fewer Starter Homes on the Market

Another thing that could positively affect your experience with single-family rental properties in Dallas is that there are fewer starter homes on the market than in years past. In decades gone by, young adults would live in apartments until they could afford to buy their first homes. Today, there’s been a shift in housing trends, and there are fewer starter homes being built and put on the market. This means that there are fewer opportunities for those who do want to buy a house on a smaller budget, and instead those people are looking for single-family rentals until they can afford something larger.

With this information, you can see how single-family houses make great rental properties in Dallas. Consider this market for your next investment.

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Good News for Investors: Dallas Needs Medical Real Estate Solutions (2019 Update)

Real estate has always been a recommended choice when investors look for assets to diversify and stabilize their portfolios. Over the past eight years, however, we’ve seen a lot of upheaval in the real estate sector that has left investors baffled and uncertain. Fortunately, with the US economy on the mend and housing markets around the country recovering, that instability seems to be waning significantly. However, some markets are still more lucrative than others, and investors are still wary of making the wrong choice.

So what can you do? And where should you invest your capital? Healthcare real estate in Dallas is a market that many have not previously considered but which may prove to be incredibly profitable.

Rising Demand for Medical Care

First of all, thanks to the Affordable Care Act, more and more Americans are signing up for health insurance. Many do it to avoid paying a fine on their taxes in April, but once they have coverage, they want to take advantage of the services they’re paying for. Thus, we’ve seen a massive increase in the demand for all kinds of medical care in Dallas.

With doctors and other medical professionals booked solid for regular visits and emergency care, Dallas is in need of medical real estate solutions. With more office and clinic space, more medical practices can open, fulfilling more of this high demand.

And medical offices and clinics aren’t the only in-demand healthcare real estate in Dallas. While there has recently been a major influx of younger professionals moving to Dallas, the senior population of the city and surrounding areas has not dwindled at all. In fact, thanks to superior medical care, people are living longer than ever before, which means that they need geriatric care services. Investors would be wise to consider backing senior care facilities, as well as other medical real estate solutions.

A Stable and Lucrative Investment That Could Help Your Community

Basically, there’s a huge demand for more healthcare real estate in Dallas because people need medical attention when they’re sick and preventive care when they are well. From flu shots to elder care, there’s no shortage of need for medical real estate solutions here, and real estate investors can provide that solution by providing the funds necessary to build these facilities, offices, and clinics.

Essentially, when you invest in medical real estate, you’ll be almost guaranteed to see positive returns on your investment in short order. Not only that, but you’ll also be contributing to an improvement in your community, which will help to increase property values and potentially have a positive effect on your other investments in the area, as well. Consider investing in medical real estate and see how much you can help yourself and your community at the same time.

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What’s Your Strategy for Your Real Estate Investment? (2019 Update)

You no doubt already know that there are numerous ways to invest in real estate, but have you chosen the strategy that will work best for you, your portfolio, and your investing style? Different strategies have different levels of involvement, with some being more active and others being almost entirely passive. You should consider this when you decide which type(s) of properties to invest in, and you should consider which strategies are best suited for your budget now and in the future.

Cash Flow Rental Properties

The first type of real estate investment that most people consider is a single-family rental property that will bring in monthly cash flow to increase your wealth. You can purchase this type of property in a couple of different ways, depending on how much time you can afford to invest and how much capital you have for your initial investment.

Foreclosure Properties

Some investors with more time and less capital will opt for purchasing distressed properties in short sales or at foreclosure auctions. They’ll then renovate the properties, rent them out, and act as their own property managers. On paper, this will almost always result in a higher profit margin, but it also involves higher risk (properties that need more work than you bargained for). It also requires much more time and energy.

Turnkey Rental Properties

Other savvy real estate investors will put a little bit more capital into their initial investment for turnkey properties that are move-in ready with no need for renovations. These properties often come with property management services, and some even come with tenants already in place. While you will spend more on the front end for one of these properties, you are almost guaranteed to begin collecting positive cash flow immediately and consistently.

REITs (Real Estate Investment Trusts)

If you’re looking for a real estate investment strategy that’s completely hands-free and passive, you may want to consider investing with an REIT. When you do this, you will not actually purchase a property or a piece of a property, but rather you’ll purchase stock in the trust itself. The trust will then invest your funds – combined with other investors’ funds – to purchase larger investment properties, such as condominium complexes or retail spaces. As long as you own shares in the REIT, you will collect returns, usually on a quarterly basis.

These are only a few of the most common and popular real estate investment strategies. Before you invest, find out more about each of these, as well as other real estate investing strategies and get expert advice on the best types of investments to improve your ROI and grow your investment portfolio.

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How to Avoid This Big Turnkey Pitfall? (2019 Update)

Real estate investment has become a Millennials game. Members of the younger generation are themselves putting off home ownership, while looking for high performance investments that won’t take up much of their time and don’t require hands-on DIY work to become tenant-ready. This search for low-maintenance investment opportunities can lead investors on a wild goose chase as they attempt to find relatively safe transactions that offer long-term yield and a self-sustaining property model.

The truth is that turnkey is not a get-rich-quick scheme, and it involves making solid choices and not just buying whatever comes along because the marketing is slick and implies huge returns on a small investment. So how do you avoid falling into the trap of big hype and overstated promises? It can be confusing sorting out all of the investment property advice in Dallas.

Be Discerning

The best thing you can do as an investor is seek out not only properties that have a promising future as far as ROI, but those that are suitable candidates for smooth management and upkeep. By its very definition, turnkey means that the property is already renovated (or that step is being taken care of by the management company), and either has tenants, or tenants will be installed by the management company.

What can get in the way of these foundation steps? When you only go for properties because the initial outlay is cheap and promises of lavish returns are being bandied about, there can be serious underlying issues that turn the entire thing into a nightmare you can’t get out of soon enough.

The problem is that when the price is rock bottom – under $50k is considered a “cheap rental” in most average markets – there’s not enough padding built into the transaction to allow for proper reno. When renovation prices have to be kept on the cheap, you end up with deferred maintenance costs, which then eat into your rent ratio over the long term. Not only that, but deferred maintenance can mean malcontent tenants, and unhappy tenants translate into high turnover, which parlays into more expenses for the owner – you.

Put Quality First

Protect yourself from money pits by going for quality, customer service, and long-term hands-free sustainability over shiny promises on low-end properties. While a higher quality property managed by a company that provides a high level of service and comprehensive communications with clients and tenants will cost you more on the front-end, these are the properties that are going to demonstrate the best results. This will materialize in the form of happier tenants, fewer deferred maintenance issues, less oversight required on your part, and a smoother overall transaction for everyone involved.

Make sure you’re not only choosing high quality turnkey rentals in Dallas that have been renovated right the first time, but that your investment and management company have the staffing and experience to provide top notch services and prompt communication.

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What Makes a Rental Property Profitable? (2019 Update)

When you’re first getting into real estate investment, you may be under the impression that you can simply pick a house for sale, negotiate a good price on the deal, and then watch the profits roll in. While that’s the ideal outcome, there’s a little more to it than that. There is a variety of factors that contribute to how profitable – or not – your rental properties will be. By taking these things into account when deciding on rental houses to make offers on, you’ll maximize your chances of creating a lucrative long-term investment that is beneficial to all involved.

Some things to look for when evaluating rental properties:

The local job market – areas with robust employment growth attract people, that’s no secret. Take a look at existing job opportunities in the area, as well as any companies that may be planning to move into the neighborhood. Of course the type of business it is will dictate whether this is a good or bad thing.

The crime rate – it’s harder to get quality tenants into high crime areas. The Internet makes it easy to not only check for these statistics, but the location and quantity of sex offenders in the area as well.

The school system – for people with families, rental houses in good school districts are a hot commodity. The quality of the school system will not only affect your efforts to get tenants into your rental properties, but the resale value of the home down the road.

Neighborhood characteristics – is the house located near a college? This could mean student tenants, which translates into high tenant turnover and summer vacancies. Other things to look at – are the yards well kept? Are there blight laws that help keep visually unappealing debris under control?

Local amenities – close shopping, dining, theaters, mass transit access, parks, gyms, etc. all make rental properties more attractive to tenants, as well as to buyers when the time comes to sell your investment.

Average rent – this will be a crucial deciding factor in your ultimate choice of rental houses. The reason for this is because you can’t just set the rent at whatever you need to make to cover your expenses and make a profit each month. Whether you pay $80,000 in a cheap market or $150,000 in an upturn, if the house next door rents for $1200, that’s about what you’ll be able to charge (given equivalent square footage, features, etc.).

Property taxes – this is another vital piece of information that will have a significant bearing on your bottom line. Property tax information is typically available through the assessment office.

No matter where you are shopping for rental houses, these guidelines should give you a good start on evaluating properties to figure out whether they will ultimately translate to a profitable piece of your investment portfolio puzzle.

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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.