The U.S. housing market is more buoyant than ever. Sales of new homes were up 14% for the end of the year, smashing previous predictions. So are you ready to take the first step into real estate investment?
Before you do, there are a number of factors to consider. Read on as we give you our tips on when to start a real estate portfolio.
Looking at Housing Trends
The key to any real estate investment is to look at housing trends. There are several factors that can impact them, and knowing how to plot and predict can help you get the most from your money. It may take a little patience, but the outcome will be much greater.
All of this becomes much easier if you invest locally. This way, you can see first hand what is going on. You can pinpoint areas that are up and coming, new developments that may impact prices, and plot it all in conjunction with wider, national trends.
Non-economic Factors That Impact House Prices
When you look local, you can see non-economic factors that impact housing prices. This can lead to you getting an excellent investment property if you are planning to buy and hold.
The first factor to look at is competition. If you are in a buyers market, it means there are a lot of homes for sale and few buyers. This gives you some leverage when making an offer.
Another factor is price reductions. Most homes are sold in spring and summer, as people want to move before the winter and the year-end. Thus, as the months drag on you may find prices drop as people try to get a sale before the year is out.
These houses will also have a longer time on the market, and you can use this to your advantage. However, if a house has been on the market for a long time there is probably a reason why. Get a sound real estate and building assessment before going in with an offer.
As well as external factors, you need to consider if you are ready to invest in real estate. It is not just about having the capital to get a mortgage that should be considered.
Firstly, think about your financial situation. If your property was to be unoccupied, would you be able to take up the shortfall? In addition to buying and real estate fees, you also have taxes, utility fees, and possible renovations you may need to pay for.
Add to this the time factor. Having property means maintaining it, creating contracts, finding tenants, and collecting rent. This cuts into your profits as well as time that you may not have.
Build Your Real Estate Portfolio
By following these real estate portfolio tips you will build a successful cache of properties. Keep an eye on national trends, but make sure you stay local. Make a plan and ensure you are financially sound.
If you found this helpful, we have many more articles. From real estate to DIY, we can help manage your property empire in the coming year.