Investing in real estate can be extremely profitable. Many people have made money off of real estate and some have generated substantial amounts of wealth. Those that have created the most wealth are usually in it for the long-haul instead of looking for the get rich quick scheme. True real estate investors know there will be many ups and downs owning Real Estate but they are prepared for this and know that being patient will pay dividends. Leveraging Real Estate and staying in it for many years will bring the most significant gains. Just ask those that sold while the market was down in 2008 and 2009. Had they held onto their properties they would be reaping the benefits today.
If you are thinking about investing in Houston Real Estate here are some tips to help you along the way:
Be in it for the long-haul. Having a tenant pay down your mortgage and an increasing value in the property, is a great double whammy. Not to mention the tax benefits of owning real estate. Most of these benefits are not realized in the short term, however give it 10+ years and you will be amazed at the returns. Buying and flipping properties is good for a quick profit, but those deals are hard-to-find and sometimes even harder to make happen. Carrying costs, unforeseen problems, competition and realtor fees all can eat into your profit. Plus, today’s tax code is not very favorable to flipping properties unless their held for a minimum of two years.
Location. You have heard the old adage location, location, location. This is very true. Look for qualities like a good Houston school district, quick commute to business centers or an area that is in the path of progress. If you don’t have time to research or don’t know about the location, give us a call and we can help you find the best investment property for you. Picking a bad location can mean subpar rents and no price appreciation. Those are two very big negatives for owning rental property and will doom your investment.
Know what you are buying. Get preapproved through your bank or mortgage lender and go over the numbers thoroughly. Make sure the numbers work and that you don’t purchase a property that will either take too much money to fix up or will not really be able to rent out for the desired amount to make a profit. Make sure to look at everything: Taxes, Insurance, HOA dues and what you will pay for principal and interest. Along with all of your costs to get the property ready to lease. While some investors can handle negative cash flow for a prime property, most investors need to cash flow starting day one. Add up all of the costs and if the numbers don’t work, be patient and find one that does
Hire a property management Houston company. Unless you are a contractor or someone with a lot of free time on your hands it’s best to let a professional manage your property. Collecting rents, dealing with tenant issues and making repairs can be a big drain on your time. Problems with the property and tenants will happen at the most inopportune time. Not being able to handle these in a timely fashion will cause problems with the tenants or can even cause problems with the property.
Overall, investing in Houston Real Estate can be a great way to add wealth. Going into the process with as much knowledge as you can and hiring the right people to help you will make all the difference in the world. At AREA Texas Realty and Management we’ve helped numerous investors become successful. Call us today and we will be happy to work with you and set you on the path to Real Estate success.