With the price of homes becoming more and more affordable, we have seen an increase in the amount of homes being sold each month. In fact some reports showed an increase in the average price of homes sold from January to February. Granted the increase has only been in certain areas as others are still decreasing. My point in bringing these things up is that people have started buying again. Even with all the negativity around the Real Estate market, home prices make sense right now. The smart ones realize this and are taking advantage of the down market.
Who are the smart ones buying homes right now? While there are a lot of primary residences being purchased, the experts are saying that 40%-60% of the homes being purchased are for investment purposes. This appears to be pretty accurate, as we have experienced a high volume of calls from investors looking to buy homes. Not only are seasoned investors getting back into the Real Estate market, there are a lot of people looking to buy their first investment home. While buying an investment home can be a scary thing, the best thing an investor can do is higher a Property Management Company.
Property Management is where the rubber meets the road with Real Estate investment. Investors should begin looking for a property management company before they even begin to look at homes. There are a lot of sales agents out there who will tell you whatever it takes to make a sale. Those sales agents usually don’t have Property Management experience. They may be able to help investors find a great home, but that home may be in an area that has lower rents or longer vacancy times. An experienced Property Manager can inform owners of rental markets in each city along with other important details a new investor may never even think about. While no Property Manager can predict the future, they can help set the correct expectations that will allow the investor to make the smartest investment.
The search for an investment home can be a fun and exciting time. Closing escrow on the home is usually when the stress begins. There are a lot of things that come with purchasing a home that most investors don’t think about. Was the property registered as a rental with the county? How long is this home going to take to rent and how much will it rent for? Should I accept pets? How much security deposit do I ask for? What if my tenant does not pay? A good property manager will know the answer to all of these questions and even bring up more that need to be considered.
It may sound easy to place a tenant and start collecting rent each month, but there is a lot more involved with managing an investment home. Also, investors aren’t just purchasing in their home cities. We have owners who own investment homes throughout the country. There are tasks involved in managing a home that can’t be done from another state where possible fines could be involved.
The time to buy is now. We may not see prices like these ever again and these prices won’t last forever. However, investing in Real Estate is not easy or cheap. The best thing an investor can do is seek the guidance of a property manager before they begin looking for a home and then let that property manager protect that investment and take the stress out of trying to manage the home themselves.