A few years ago, speculation caused our market to crash, and crash hard it did. When home prices came to a halt the party was over. Now that the dust has settled, 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!
1. Be Picky – If at all possible, buy the best homes in the best locations. Don’t buy garbage, just because it’s cheap. When pricing comes back up, the trash will still be trash. Better locations and better homes will see more appreciation.
2. Watch 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. Not analyzing these numbers beforehand is a fast way to see your pockets emptied.
3. Positive Cash Flow – Please do everyone a favor and buy a property that will actually put money into your pocket every month. Take all your carrying costs, including a mortgage if you have one (see #2), subtracted from your rental income and make sure it’s a positive number! Surprisingly, oftentimes properties are bought without doing the numbers and the owner quickly runs out of money, becoming drained financially and mentally in no time.
4. Sweat Equity – Don’t be afraid to put your sweat into the property. This is a quick way to build real value in your property. By fixing the property up, not only will you be able to rent it quicker, you will also add to the value of the home.
5. 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!
6. Keep it Simple, Have Fun – Stick to good locations and do your homework before making an offer – this will allow you to not be overwhelmed and enjoy the process more. Most importantly, have fun. Real Estate ownership is exciting and has plenty of variety.
Take advantage of today’s market; it won’t be here forever. Follow these simple steps and one day maybe we’ll all be calling you Donald Trump!
Need help selling, buying, or with Property Management? Gulf Pointe Properties is glad to help: Call: 239.825.2234, Gabe@GulfPointeProperties.com or www.GulfPointeProperties.com Gabe Mellein is the broker of Gulf Pointe Properties, 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.