Investing in Residential Real Estate

Investing in real estate requires a knowledgeable real estate agent to aid you in researching, making a good purchase, and properly managing the property.  Real estate investment can reap substantial rewards if you are prepared and know what you are doing.  IMAX Premier is the ideal company to help you with your real estate investment based on our proven track record and extensive knowledge in the field.

One common way to invest in real estate is to purchase a property that will produce income like a single-family home or apartment building with the intent to rent the property or units out of it.  By renting out the property or units of it, investors get income from the tenants rent as well as allow the appreciation of the property over time.  Additionally, there is protection against inflation because as costs increase, rent can also increase.  

However, you should beware that there are potential adverse results.  The real estate market is typically cyclical in nature and investing in real estate is not as liquid as putting money into the stock market.

When considering whether or not to invest in real estate, ask yourself what expertise you have that can add to the property value.  Contractors can renovate and flip a property and lawyers can write leases.  Perhaps your expertise is in management and you plan to lease the property.  Before making the decision to become a landlord be certain you can handle the job including the constant upkeep and managing of tenants.  If you plan on hiring a property manager be sure that you can afford the additional cost while still making an income off the investment.

It is imperative that you consult with a real estate professional to assist you in finding and evaluation potential investment properties.  Contact a broker with significant experience with working with investors and investment real estate.  IMAX Premier has both the knowledge and experience to help you with your investment and we will ensure that you generate the maximum profit.

Some aspects to consider when looking at potential properties are the location, strength of the local economy, and the school districts.  To determine whether the property is affordable you must budget every cost associated with the property including closing costs and insurance.  If you plan on renovating the property, be sure to have a home inspection performed to make sure the structure is sound and add the costs of renovation into your budget.  Remember to add a cushion for unforeseen costs.  

Just like you prepare to purchase the property you should also plan your exit strategy and estimate how long you plan on owning the property.  Be sure to be prepared that every dollar that is scheduled to come in as income from the property will not always be profit.  Consider opening an escrow account for any repairs and disruptions in cash flow resulting from vacancies.

There are several aspects you must watch out for when purchasing real estate as an investment which is why it is so important that you have the help of a real estate professional.  IMAX Premier will prevent you from making any of these common mistakes and will make the process as profitable and stress-free as possible.

One common mistake is overpaying for the property and to avoid making this mistake, be sure to consult with your agent and do some research.  Typically, the profit is made when you purchase a property below market value and some investors make their profit by purchasing properties that need repairs or renovations.  Properties that will result in a positive cash flow without any repairs may have other areas that need improved or significant maintenance performed so mismanaged properties are attractive investments.

Another thing to watch out for is overlooking rules and regulations.  There are a plethora of rules and laws in the housing sector covering a vast array of problems including federal fair housing laws to laws about how to properly disclose the presence of lead paint.  Noncompliance fees can be very costly so be sure to take every precaution to ensure that you are complying with all laws and regulations.  

Also be sure that you do not make a mistake like not screening for good tenants.   Be sure to check the tenants credit prior to the signing of the lease and ensure they can afford the monthly rent payments.  The longer a tenant resides in the property, the better because everyone one tenant moves out and another moves in, it will typically cost about two and half months worth of rent assuming there isn’t severe damage.  This is due to marketing, down time, or minor repairs that the property needs.

Be sure that you are not taking too much on too soon.  If this is your first real estate investment, start small.  Consider a condo or a duplex so you can experience what it entails and decide whether real estate investment works for you.  Don’t spend too much money on superfluous improvements.  Major spending in certain areas won’t provide a significant rate of return on investment profits.

Be careful that you do not enter into a bad partnership.  It is common for investors to partner with others to make the investment more affordable but be sure that you are comfortable with the arrangement and you trust your partner.  If you are new to investment and partner with an individual with substantial knowledge of the real estate business, review the other investors past performance before you enter into an investment together.

If you do your homework and make necessary preparations, then real estate investment can be a great source of income.  Investing in real estate agency is unlikely to make you rich overnight but if you do adequate research, purchase the right property, and effectively manage the property, your profits can be abundant.  But there are precautions to be made and to best avoid having the investment backfire, consult IMAX Premier to assist you.  Our knowledge, experience, and connections will provide you with the optimum chance of success and profit.  

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