Does the thought of investing in real estate make your heart quicken with excitement or terror course through your veins? It doesn’t have to be such a terrifying thought. In fact, realtor Brittany Paschal says it’s been shown that investing in real estate can generate consistent, long-term wealth. Before you start binge watching HGTV for ideas, here are few things Brittany says you should consider.
Do you want to flip or rent?
Deciding whether you are looking for a flip or rental property comes down to a few different factors. There is an overall national shortage of housing. This means, finding a home to flip — especially one with the right combination of prime location and affordability — is hard. Brittany says you’ll need patience and guidance from a knowledgeable realtor on realistic resale prices and area growth trends. If you are a people person and don’t mind a longer, slower approach to investing, purchasing a rental may be the best option for you. Overall, Moore County and its surrounding areas is a good place for quality rental properties with steady demand at various price ranges. Brittany advises that those interested in managing a rental property should be mindful responsibilities that accompany it.
Do you have cash on hand?
If you’re investing in real estate, you can expect to put down a 20 to 30 percent down payment on investment property loans and pay a higher interest rate than those who are purchasing a home for personal use. If you are looking at buying in an auction, expect to have cash on hand for the total purchase amount and a proof of funds letter from your banker (and/or cashiers checks on hand). From a rental standpoint, having cash reserves to cover cosmetic updates and repairs is a must.
Are you handy, or are you willing to hire someone who’s handy?
Sure, you can see past the cosmetic shortcomings of a property to polish it into your investment dream home. But, hiring someone with the experience to make repairs and update a property is a good idea. During your due diligence period, get an inspection to see potential problem areas within the home, as well as get the HVAC, plumbing and electrical checked out. Taking short cuts and not hiring qualified individuals to work on a home is a quick way to end up with a big problem.
Investing in real estate can be tricky, but Brittany says that with the right guidance and a fair dose of patience, you can make it happen.
Brittany Paschal is a realtor with Front Runner Realty Group. Learn more about her business.