Since the fall of Miami’s real estate market in 2008, real estate property prices have steadily grown throughout the following years with the city’s strong economic growth. However, this doesn’t mean that you should immediately jump on the real estate investors bandwagon. To avoid all the unnecessary stress and potential financial loss of a failed investment, check out Best Real Estate Directory for more information, and continue reading this article.
Here are some key real estate power tips for you to learn:
Know your market
Just like any other investment, it’s essential that you learn all the things you need to excel in your selected market and become an expert on it. Keep yourself well informed of Miami’s current market status, as this will be critical when planning your future investments. Positioning yourself one step ahead of the market can help you invest in better properties and become a more productive real estate investor. Here are some factors that you should look into:
- Current market trends
- Average rent
- Unemployment rates
- Interest rates
- Average Income
Look for the best location
When investing in real estate properties, it’s critical that you choose the right location for it, as your property will only be as valuable as the area where it’s located. Look at how far it is from the nearest business establishments, schools, and hospitals. Neighboring properties can have a negative effect on the value of your investment. If you’re considering to buy a cheap house in an area with high flood risks, you might end up losing a lot of money, as a lot of tenants and property buyers consider flood risks as a red flag.
As you’ve already done your market research, use it to pinpoint fast-growing neighborhoods. Here are some simple and good indicators of a growing neighborhood:
- There’s a lot of small, locally-owned businesses within the area
- High employment rates
- A newly opened Starbucks
- Increasing numbers of bars, restaurants, and grocery stores
Look for rental properties
Finding rental properties in developing neighborhoods in Miami can be a great way to start investing in real estate. Fast moving neighborhoods usually offer tax incentives and growth potential for buyers. It can also allow buyers to maximize their profits to ensure that the property’s income covers all the related costs of owning a rental property. Here are some of the benefits of investing in rental properties:
- Gain additional revenue from property value growth
- Income from renters
Keep a rainy day fund
If you’re buying a rental property for steady cash flow, then make sure to account for all future expenses and set aside a rainy day fund for the unexpected ones. Having extra funds can help you go through small emergency repairs. Some real estate investors underestimate the potential costs of house repairs. These repairs can be vital to the comfort and safety of your tenants, and are essential to maintaining the property’s value.
It may seem arbitrary, but a property’s bathroom can have a big effect on tenants and home buyers. Many people consider their bathroom as an essential part of their home because of various reasons. Your property’s bathrooms can significantly increase or decrease the value of your investment.
A five-bedroom house in a great neighborhood can be appealing. However, if it only has one bathroom, you should reconsider investing your hard-earned money in it. Tenants or home buyers will not want to wait for bathroom time.
Look for wholesale prices
In real estate investing, you should avoid paying the full price for properties. Instead, look for wholesale priced properties that are usually offered with steep discounts. Although some of these properties will need some work, rehabilitating them can still give you a high-profit margin. Buying wholesale properties can allow you to maximize your return on investment, as you can easily sell it for twice its purchase price after it’s been rehabilitated.
Understand crime rates
You must learn and understand the area’s crime rates. It’s an important factor to analyze when looking for properties to invest in. Buying a house in an area with high crime rates can be a risky investment, as home buyers and tenants consider safety as important as every other factor, including price. Generally, areas with low crime rates will have higher property values, as buyers and tenants will be more willing to spend their money for that added security.
Investing in real estate can offer a lot of potential for significant investment returns. However, it’s also essential to know the risks involved in investing in real estate properties. Always make sure to do your research and understand all the factors involved before you start investing your hard-earned money.