There are several reasons people purchase real estate. Many people do it simply because they need a place to live. Some may buy a home for a relative, while others may purchase a commercial property as a home for their business. But real estate is also a good way to make money. While it’s not universally true, property values often rise, which is why homeowners are told that their home is their most important investment.
But real estate is also big business with investors trying to buy property at a bargain and sell it at a profit. They will look to improve the property to increase its value, or rent property as a source of income. Cliffco Mortgage Bankers has dealt with all types of real estate transactions, so we want to look at real estate investing and some current trends. Please note that none of this should be considered investment advice on the part of Cliffco.
Some Basics of Real Estate Investment
According to The Balance, real estate can be a great investment option, but you need to understand what comes with your investment. For example, you need to understand that you will be paying out money to maintain the property. If you’re planning to rent out the property, you need to understand that there will be times that you will have income gaps, such as when you’re between tenants. They recommend that you plan out all of these expenses before you purchase the property and start small. Maybe buy a duplex or a home with a basement apartment so you’ll be living in the same building as your tenant. Also make certain to research the property carefully.
Arguments for and Against Investing
In August 2016, MarketWatch published an opinion piece saying this is the best time in history to invest in real estate. They cite surging housing prices in a market that’s still rebounding from the 2008 housing bust and increases of investing websites and funding options.
But Kiplinger warns that there can be some pitfalls to real estate investment. They suggest that when those who are hawking real estate investments talk about a home being sold at a profit just a few years later at a much higher price, they don’t always mention the price the investor paid to make improvements on the property and other expenses incurred.
Millennials and Real Estate
One group that seems to be taking the plunge into real estate investment are millennials. According to Forbes, a recent survey of Americans’ investment preferences shows that 55 percent of millennials are interested in investigating real estate, while research from Fannie Mae indicates 85 percent of millennials think real estate is a good investment. With millennials becoming the largest generation of Americans in terms of population, they can have a major impact on the real estate market. Millennials have watched the real estate market rebound and are moving into the stage in life where they’re starting families and buying their first homes.
Let Cliffco Help You Understand Your Options
There’s a lot of reasons to invest in real estate whatever stage of life you’re in, while at the same time there are reasons to be cautious. If you’re considering buying property for any reason, one of the biggest considerations is getting a loan. Cliff Mortgage Bankers can help you understand your options. To get started, contact us today.