Lubavitch Real Estate Blog

Posts Tagged ‘Investment properties’

Real estate as an investment is in most cases a fiscally sound opportunity-provided the price and property are right. As the maxim goes, “They are not making anymore land.” Real estate is of finite supply, but a person needs to how to compare and contrast properties to choose the best investment.

1. Determine the sale price of comparable properties that were recently sold in the neighborhood. This will give an investor an idea of the market of the property. The most complete comparable sale information is available through any local real estate agent.

2. Ascertain the desirability of the property’s neighborhood. Many issues factor into this comparison, including new construction, schools, crime rate and tax rates. The intangible value of the property will be greater if these issues are favorable.

3. Establish the amount of work that needs to be done to make the property up-to-date. Some properties will need almost no upgrading, but these properties cost market value or above. Typically, the best investment properties will need some work. An investor must determine if the labor and cost are feasible for a return on investment perspective. Read the rest of this entry »

Property values are unpredictable and can lead to a loss of your investment. A potential real estate investor may find more stability by becoming a landlord–people always need a place to live, even when the economy is hurting the rest of the real estate market.

Find a good location. In his book “Increase Your Financial IQ,” Robert Kiyosaki cites an example in which he buys an apartment building near a growing educational institution where the housing demand will be strong.

Property near a military base that is holding steady employment is also a good location.

Research the future growth of sources of tenants. If you bought real estate in Southeast Michigan five years ago, it would have looked like a good investment in absence of analyzing the future of the automotive industry.

A close look at the business models of GM, Ford, and Chrysler would have shown that each was the high-priced producer of a globally over-supplied commodity.

Their downfall and associated evaporation of the local real estate market was predictable. Before investing, look at the health of the major employers, the enrollment trends of universities, or the base closure lists of military institutions around your candidate property.

Employ good partners. You may think you’re capable of fixing up a place and maintaining it once it’s rented, but unless you are skilled in installing plumbing, staining cabinets, laying carpet, fixing a toilet, repairing siding, hire a partner to handle these things for you. Read the rest of this entry »