Let’s start by getting clear on real estate investing.
While beautifying and improving our community may be a side benefit, the one, the ONLY reason to invest in real estate is to make money. Real estate investors want a return on their money, and that is the sole purpose in getting involved in buying a property. If investing in Houston, Texas real estate is what you are all about, you’ve come to the right place.
If you have the proper investment strategy, you will know when to get involved, and when to back off. There are investment strategies to determine where, when, how, and how much to invest to maximize cash flow and growth. These are the strategies we excel at. You can go it alone but beware. Remember, we are here to help.
Buying Houses as an Investment
If you have money or great credit, buying houses is easy. Buying houses for predictable rental income and cash flow is an art. It takes experience and a knowledge of what does, and doesn’t rent, and where.
Houston has solid appreciation in good neighborhoods with good schools, transportation and shopping. Consider buying in solid neighborhoods where jobs are available. Think about your exit strategy on a property before you buy it. Are you looking for a long term tenant who will want to buy? Are you planning on holding on to the property until pay-off? Don’t just buy based on monthly income. Should you need to, will you be able to sell quickly and gain on your investment? That is an important question many recent real estate investors failed to explore.
Here are some important items to keep in mind when considering buying houses as an investment:
- Buy close to where you live so you can keep an eye on your property and tenants. Anyone who has ever owned property has had someone move out in the middle of the night. It is frustrating, aggravating, and if you are not aware of it quickly, can be very costly. Keep a watchful eye on your property. Living, or at least working, nearby will allow for keeping a watchful eye.
- Avoid the 4 major concerns of purchasing an investment property. They include radon, lead paint, mold and asbestos. These issues can turn a great sales price into a nightmare.
- Bigger is not always better. 4 small bedrooms in a home may well produce better income than two or three large bedrooms. More bedrooms can equal better income.
There are seven financial areas you need to focus on when investing in rental properties. They include:
- 1. Costs of repairs and maintenance.
- 2. Insurance
- 3. Taxes
- 4. Mortgage payments
- 5. Assessments
- 6. Costs of having the property sit vacant
- 7. Unexpected expenses
All of these areas are important to consider if you want positive cash flow from your property. Be sure to especially account for costs you will need to absorb when the property is vacant. It could be for months, especially if repairs are needed between rentals.
Once you understand the basics, you should understand now is a GREAT time to buy in Houston. Prices are solid and increasing. Inventory is shrinking. We are realizing that Houston, and Texas in general, have been less hard it by the recession, and we are recovering faster than the rest of the country. It is time to take advantage of this particular time and place in real estate investing, and we can help.
So what are some great tips to getting started? While there are no sure fired ways to investing in real estate there are certainly ways to increase your odds of success. Here are some suggestions:
- Look for three bedroom houses with fenced yards and two car garages.
- Remember, single family homes rent better than condos.
- Have your financing lined up.
- Good properties are going fast. Get ready to react quickly.
- Set up your vendor network of resources including maintenance and repair people and a lawyer who will help you with evictions and related matters.
If you have any questions, please contact us. We are your source of Houston, Texas real estate answers, whether for commercial, investment or residential..
Source: Houston Association of Realtors