Investing in Real Estate
Real Estate in most cases, is always a good investment, if you plan on holding the property and using it as an income producer. If you plan to flip it for a profit, then you will care more about the price you pay, because you will need to make a profit when you sell. It all depends on what your strategy is for Profiting in Real Estate. Determine what you want to accomplish in real estate and make plans to get you there. What niche in the market are you going to target, will you target multiple markets? Are you more comfortable being a Landlord, or do you see yourself finding great deals on properties, fixing them up and selling them significantly higher than what you paid for them.
You can do either of the above, or you could do both, using one to compliment the other.
Advantages to “Buy and Hold”
Rental property provides positive income stream monthly.
Property appreciates over the years increasing your equity in the property.
One of the best tax write-offs left for investors; you depreciate the asset over its lifetime, all property taxes and insurance are tax deductible, and you write-off your maintenance expenses.
Deferred capital gains.
Disadvantages to “Buy and Hold”
Planning and coordinating maintenance activities throughout the property lifecycle.
Managing Tenants.
Advantages to Flipping (Buying Low and Selling Higher)
Immediate profit from sale of the property.
Disadvantages to Flipping Properties
Homework, especially in slow markets when properties are competing with a high number of distressed properties for sale.
Immediate taxes
Tucson Market Update
There are some great deals out there. Properties are selling at significant lows when you compare to the highs seen in earlier years ago. We are experiencing an an era in time, where we can purchase real estate, in some cases almost 50 cents to the dollar. Deals are, however, getting a bit harder to find. Just to give an example, Nov 2010 there were just over 10,500 homes for sale in Tucson, whereas, Nov 2011, just over 6000. Inventory is beginning to stabilize, demand for single family homes continues to increase as housing inventory decreases. Home prices should and probably will begin to gradually increase. This trend will probably continue, unless we’re hit with another round of foreclosures, which will compete with existing inventory and make it harder for sellers to get their asking price.
In summary, real estate can be an excellent investment. It is an awesome vehicle for wealth building. Remember, set realistic goals, do your homework, especially if you plan on turning the property quickly. Use a local Realtor to help you find great investment opportunities. Preferably, a Realtor that’s an active investor, and currently owns and manages investment property. This is very important; it’s hard to give sound advice on something you’ve never done. It’s guess work and opinion, if you haven’t done it.
OUR TEAM is here to help you accomplish your real estate investment goals. I began investing in real estate in 1991, when I was fortunate enough to purchase my first property. I still own that property today, in Papillion, Nebraska. I’m a licensed Tucson Realtor since 2001. We can help you find properties selling below market. Our team specializes in the transition of a property from “Fixer” to “Move-In Ready”. If you’re an out-of-state investor and you want income property in Tucson, our property management division will also manage the rental process for you.
For a current list of Tucson Distressed Properties, CLICK HERE. I can also provide updated lists of Tucson Area Foreclosures and Short Sales. Just let me know what your criteria is.