Why Is Real Estate Rental Property A Good Investment
As some of you are aware, I am a Florida registered investment advisor, and although I spend most of my time on my real estate business, I still keep my licenses "active" and have a third party "manage" my client's portfolios. I have written in previous newsletters about investing into real estate using REITs (real estate investment trusts), and self- directed IRA's.
According to a joint survey by BiggerPockets and Memphis Invest in 2012, "one out of eight, or 28.1 million Americans, either consider themselves to be residential real estate investors or own residential investment properties today." In a 2016 "Pew Study" conducted on information from the census bureau, nearly 37% of the U.S. population are "renters." Here are just a few reasons why rental properties could be a very good investment for the right investor:
Since the recession of 2007-2009, many Americans do not have a credit score worthy of securing an "affordable" mortgage. In fact, many don't even enough in savings for a down payment. Increasing student loan debt is also making qualifying for a mortgage more difficult. The real estate market will go up and down, but the irony of owning rental properties is that demand will never end. People always need a place to live.
Depending on your finances, rental properties also offer an incredible amount of variety within this asset class. One could invest into single-family houses, small multifamily properties, large multifamily apartments, office buildings, and any of a number of other options.
There are several ways to capitalize on profits such as cash flow, appreciation, and tax benefits. To maximize your tax profits, check with your accountant for further details.
Last but not least, "leveraging." Although I am not usually in support of borrowing money and incurring debt, leveraging is a great way to allow you to use a bank's money and spread the risk on your overall financial objectives.
Are Home Inspections Worth It?
In any real estate transaction, it is always stated, "buyer beware." Although sellers are not required to complete this specific SPDR (Seller's Property Disclosure-Residential) form, a residential seller does have to comply with the rule established in Johnson v. Davis. In that case, the Florida Supreme Court held that "where the seller of a home knows of facts materially affecting the value of the property which are not readily observable and are not known to the buyer, the seller is under a duty to disclose them to the buyer." These material facts are sometimes referred to as "latent defects." The SPDR form is to be completed only by the seller, not the realtor or broker!
Although I would like to think all seller's are honest and will disclose any material fact, some will not, for fear that it could negatively impact the value or sale of the property. This is why in my opinion it would be in the buyer's best interest to always have an inspection completed. Even if the home is sold in "as is" condition. Home Inspections range in price from $300-$700 depending on the size of your home and if there is a pool. Your home is one of, if not your largest investment, this is a small cost for peace of mind!
River Strand Community- August Updates
In the month of August, 10 properties were sold in River Strand community ranging from $168,500- $560,000. Currently there are a total of 22 properties available including single family homes, coach homes, villas, and condominiums available to purchase from $179,900 to $889,000.
If you reside in the River Strand community, be on the lookout for my monthly newsletter, which will provide further details of our beautiful real estate community. It will include market trends, local vendors, and much more!
If you, or you know someone who is looking to buy, sell, or invest into real estate in the near future, please contact us at Keller Williams On The Water. Michelle and I appreciate the opportunity to assist you with all your real estate needs!