How to Start Investing in Real Estate
Investing in real estate spans from casual investors to corporations. Finding your place within that span can be time consuming and challenging. Many new investors use real estate as a side hustle for additional cash flow.
Have you ever considered advancing your real estate portfolio with a Real Estate Consultant?
How Do You Create a Diversified Real Estate Portfolio?
Most of us are familiar with the concept of a diversified stock portfolio or retirement funds.
Investing in real estate is no different. Diversification of investments can occur across locale and property type. A Forbes Article, âHow To Diversify Your Real Estate Portfolioâ suggests investing 60% in multi-family, 20% in vacation rentals and 20% in REITâs or Private Equity Real Estate Funds.
Define Your Goals
What are your short and long term goals for your real estate portfolio? Are you seeking property appreciation, cash flow or both? How much debt are you comfortable carrying? How much time do you have for management of your properties?
Do Your Research and Choose A Solid Market
Market choice is time consuming and exceedingly important. Mature markets carry a higher buy in and provide stable cash flows. Middle markets offer more value with potentially more risk.
There will always be a growing demand for affordable living space. Investing in multi family properties in a diverse market can provide stable cash flows for years.
Affordable Housing
The need for affordable housing is an ever-increasing demand in most markets around the world. People need a roof over their head and apartments are the top choice for many including singles, students, young professionals, and low-income workforce. With such a vast target market, apartment investing tends to be less risky than a variety of other asset classes.
Apartments Or Single Family Homes?
The answer here is easy. Investors have the ability to force appreciation with apartments by capital improvements, increasing rent and providing services such as laundry, security and parking. The value of a single family home is dictated by other comparable homes in the area, not the propertyâs ability to generate cash flow.
Strong and Stable Cash Flow
Cash flow is the net rental income you have after accounting for all expenses. Investing in multi-family has significant benefits over renting single family properties. A slight rental increase across the complex will result in a much higher surge of cash flow and higher ROI.
Tax Advantages
There are many strategies for reducing taxes as a multi-family investor. You will need to work with a tax accountant as each situation is unique. You will be able to minimize your tax obligation with accelerated depreciation, capital improvements and 1031 exchange when selling.
Vacation Rental Investments
You have heard it before and it will continue to come up: Location, Location, Location. Many
vacation destinations have rental demand but it is critical to assess annual occupancy rates.
Choose A Market That is âAirbnb Friendlyâ
Many urban areas have placed restrictions on Airbnbâs. You must understand your market restrictions and local jurisdictions prior to your purchase.
Surround Yourself with People you Trust
Investing in real estate is rarely a solitary experience. From finding a broker, banker and investment partners it quite often takes a team to build your portfolio.
What is a Real Estate Consultant?
A real estate consultant provides expert advice and recommendations to clients looking to purchase or develop property. They are behind the scenes experts who perform extensive research and help guide clients to investment success.
Couple this with your personal use of the property and make a plan on location, size and property type.
About Me
For my husband and I, real estate investing began as a side hustle.
We began dabbling in real estate 20 years ago by remodeling, renting, and building homes while working as healthcare professionals. We both transitioned into full time real estate careers 6 years ago.
I recently acquired my Broker license in Montana, Colorado and Hawaii to assist investors in acquiring properties across a diverse market.
I have nearly completed my Graduate Certificate in Real Estate Investing from Harvard University.
Through 20 years of hands-on investing, a Harvard education in real estate, and a Brokers license in 4 states I am capable and qualified to create diversified investment portfolios for you.
Letâs Get Started
I have the tools to assist investors create solid real estate portfolios. I will research, analyze, and compare investment properties. I will work with reputable local management services to run your property.
Following our consultation I will identify properties that not only fit your buy box, but also have strong financials. Weâll submit an offer, negotiate the terms and guide you through the escrow process.
Kirsten DeHart
kirsten@woodriverproperties
208-721-4131