Real estate can be a great way to preserve and grow your wealth. There are many markets that show great promise within the US if you do a little research. Here are some tips for investing in the US real estate market.
Look for Areas with Potential for Economic Growth
Ever been to a section of a town and thought that you remembered when it wasn’t like this? Even the most run down areas can sometimes find new life given the right circumstances. Areas outside of popular cities have good potential. For example, Asheville, North Carolina has seen rent and real estate prices skyrocket over the last few years. Just 15 minutes outside of town, though, the prices are a lot more reasonable. As the city grows, the trend of higher prices will expand outside the city. By purchasing properties while the prices are still low, investors will have a good chance at returns. If your mortgage on the investment is only $300 per month and you can rent the space out for $600 a month, then you are doubling your money. Investment powerhouse and model of efficiency Kuwait Investment Consortium helps individuals and businesses find the most lucrative real estate markets in the US. Founder Fahad Al-Rajeen has decades of experience with real estate investments for both private individuals and state run organizations.
Watch Out for the “too good to be true” Trap
If the price on a property seems ridiculously low, then you should be on guard for hidden problems. A house or commercial building may need tens of thousands of dollars worth of work to make it liveable. Problems can exist below the surface, so it is always good to hire your own inspector to check for issues before you make an offer. For example, if a building is in bad shape and contains asbestos, you might have to pay a lot to have it removed.
Property taxes can be substantial in some areas. If you improve a property, the tax rate will likely go up as well. Areas such as Detroit, for example, have homes selling for little or nothing, but the taxes still reflect what could be charged when the economy of Detroit was doing well.
If you are buying a property to let to others, then your insurance costs will be higher. There are also insurance costs that are associated with a mortgage. All this must be accounted for to get a realistic picture of what type of return you can expect on your investment.
Being a landlord is not always easy. That is why many people choose to let an agency manage their rentals for them. Of course, not managing your own rental means you have to pay someone else to do it. This can eat into any profit that you hope to make. Rental agreements can vary a lot, so you want to make sure that yours is one that you can be comfortable with for the long term. It can be very hard or impossible to break an agreement once you have signed it with your tenant.
Real Estate Diversity
Investing in real estate is a practical investment for many people. If you have the assets to invest in several areas, this can be a good way to diversify your investment and eliminate some risk.