As our market continues to improve, there is greater opportunity now more than ever. What’s the best way to approach this market as an investor? Read on and I’ll give you some simple strategies to insure you make the most of your dollars!
- Location, location, location – It’s cliché, but as prices trend upward we will see our biggest gains in properties of A+ locations. If you buy a dump just because it’s cheap, it may come back to haunt you when the market rebound is in full effect.
- Beware of fees – Be careful to assess your association fees, taxes, insurance, and utilities. These are your yearly carrying costs just to be a homeowner. You can’t get out of paying them if you own a slice of paradise. The biggest kicker is homeowner association fees. They can be very expensive in some communities, so do your research because this will kill your investment!
- Positive cash flow – A lot of people feel if they break even or lose a little bit every month that is acceptable. Wrong! This is a great way to end up broke! This mentality was a major cause of our market decline a few years ago. Why invest in something if you can’t get a return on it? It makes no sense! Take all your carrying costs (see #2), including a mortgage if you have one, and subtract it from your rental income. Make sure it’s a positive number!
- Put some sweat into it – Don’t be afraid to put some manual labor into the property. This is a quick way to build real value. By fixing the property up, not only will you be able to rent it more quickly, you will also add to the value of the home.
- Think long-term – Forget about the” instant millionaire”- that’s a waste of time. Instead, build a solid foundation. Maybe it’s one house a year or one a month? Set some goals and go for it! Just think, if you only bought one house a year that paid you every month, after a decade you’d have a nice retirement and tenants who are paying off all your houses for you!
Take advantage of today’s market; it won’t be here forever. Keep it simple and have fun. Stick to good locations and do your homework before making an offer. Real Estate ownership is fun, exciting and has plenty of variety!
Need help Selling, Buying, or with Property Management? Gulf Pointe Properties would be glad to help! Please contact Gabe for advice at: 239.825.2234, Gabe@GulfPointeProperties.com or www.GulfPointeProperties.com Gabe Mellein is the broker of Gulf Pointe Properties, He has 8 years experience in the SW Florida Real Estate Market. He is a member of The Naples Area Board of Realtors, Bonita Springs – Estero Association of Realtors, Realtor Association of Greater Fort Myers and the Beach, The Florida Association of Realtors, The National Association of Realtors, and is nationally certified in Feng Shui for Real Estate.