In boom times and bust, real estate is often one of the most reliable plays for investments. When it's on a positive run, few investment strategies yield quicker and more lucrative returns than a sound real estate investment. Even when it's down, there are rewards to reap (and the comfort of knowing it's never down for long).
If you're looking to diversify your investment portfolio, here are five tips for investing in real estate.
As with any investment, you should have a goal in mind before committing any resources, financial or otherwise. Real estate offers several outlets for earning an ROI. Long-term income is gained from buying and renting, while short-term gains often come from buying, renovating, and reselling (otherwise known as flipping). There are even full, ground-up development opportunities, be it single-family homes or high-rise shells.
Whatever path you take, understand each option’s risks and rewards and ensure your specific endeavor aligns with your income-generating goals.
Real estate—even at the lower end of the price spectrum—can be quite expensive. While cash is most often used for acquiring an investment property, there are a variety of loans that can provide investors more flexibility in securing their chosen property (like Fixed, ARM, Jumbo, and FHA).
Both have their pros and cons. Talking with a lender can help you figure out the best fit for your investment strategy.
Certainly, you can make money in any real estate market, whether that market favors buyers or sellers. However, good investment begins and ends with determining if a market is fitting to achieve your investment goals.
Consider the cost of living, median household income, job market, supply and demand of housing, past sales, and current listings. All factor into determining if a market would support your investment plans. Before committing yourself, conduct a deep dive into your target market's conditions to determine how far your investment dollars will travel.
It's tired. It's worn. It's the most oft-repeated phrase in real estate. It's also true. The best real estate investments are those in the best locations. When scouting Chicago investments, you want areas that are well established with amenities and close to restaurants, shopping, entertainment, and transportation.
Great schools are always a significant factor. Concentrate on locations on the rise, with committed or in-progress development.
There's a lot of nuance to real estate. Find an agent well-versed in the local market. One who provides reliable data, a keen eye for details, and negotiation skills built from years of deal-making experience.
An experienced real estate professional will also give you their honest opinion on where your investment will have the most lasting impact. And many times, they prove to be the determining factor between a dynamite deal and a dud.
Are you interested in buying and selling Chicago real estate? From the Gold Coast to Lincoln Park to Streeterville, contact Margaret Baczkowski today and allow her years of experience and expertise to help you navigate the process. (The team is also licensed in Indiana, Michigan, and Wisconsin.)