If you do any amount of research you’ll quickly find experts in agreement. Real estate investing is a great strategy for building long-term wealth. As wonderful an option as it is, however, it’s not for everyone. If you’re considering Real Estate investing, it’s important to take a look at how you actually get started to make sure you know whether it’s a good investment for you.
Today let’s look at 3 easy ways to get started in Real Estate investing
Invest in a Second Home
The first option you might want to consider is investing in a second home. One of the obvious advantages of this approach is that it provides a nice vacation home for you to enjoy whenever you please. But with a second home, you can also earn income by renting it out when you’re not using it. There are many options that can help you make this a reality quite easily from property management companies to Airbnb or the Vrbo market. If you look in a highly sought-after location, a second home as a vacation home could quickly become a valuable asset as they appreciate more quickly and fetch a higher rental fee.
As with any investment, there are drawbacks, as well. While tenants of long-term rental properties often pay many of their upkeep and utility costs, short-term renters will expect you to carry those expenses. In addition, there could be advertising, cleaning between renters and more. It could take some time before word-of-mouth starts to spread and the property is consistently rented. Always also make sure to check the legal parameters. Some neighborhoods and condo buildings are very strict regarding short-term rentals, especially in highly sought-after locations.
A Real Estate Investment in a Rental Property
It’s no surprise that rental properties have the potential to be incredibly lucrative. The value of the rental property appreciates all while the renters cover month-to-month costs. This then creates a growing stream of passive income over time as the rent income increases and the mortgage gets paid down.
It is, however, important to know the risks you are getting into when going into rental property investments. For instance, if the house remains empty, you lose monthly income; if a major repair is needed, you have to cover the costs; and you are responsible for all ongoing maintenance needs.
Also, despite your best effort and diligence in properly vetting potential renters, you could end up with difficult tenants who end up costing you more money than they’re worth.
The good news is if you’ve ever considered becoming a landlord, now is a great time! Interest rates are still low, enabling you to purchase rental properties at a low cost. If you are looking to invest in rental properties, we would love to chat with you about some of the hidden gem neighborhoods in Sacramento County that are prime investment areas!
Your Own Home’s Investment
Last but definitely not least, don’t overlook the real estate investment potential in your own home! We know that owning a home is one of the best ways to accumulate wealth as you age. As you pay off your mortgage and as your home value appreciates over time, you will build equity. This all helps you grow financial resources for your future.
In order to find the right investment, however, you’ll want to keep a few things in mind. Remember that location matters. Neighborhood resources, school districts, and community involvement all impact the financial potential of your home. Hiring an experienced realtor is the key to success when finding your dream home that is also a smart investment.
As you search for your dream home this year, Team Lund would love to partner with you to make your real estate investment dreams a reality. Contact Team Lund today and let’s chat or message us over on Facebook or Instagram with any questions!
We can’t wait to hear from you!