on Thursday, July 19th, 2012 at 11:49am.
Real estate investing is popular today for good reason. It is a way to make varying amounts of money with relatively low risk compared to other types of investing. Almost any type of property can be turned into real estate investing. Today’s low vacancy rates, huge demand, and decently high prices for renting have created investment potential that hasn't been there in recent years. While you should feel encouraged and have your interest piqued, knowing a few pitfalls to watch out for before browsing real estate listingson startpacking.com will save you time, money, and frustration.
1. Bloated Expectations for Boise Investing
Boise is a great place to invest, but don’t expect returns of 10% or more. While it is possible, it isn't likely, and you should be happy to just pay the mortgage with the rent you receive and make a few percent on appreciation. 7 or 8% is a return you could get if you’re careful and investing well.
2. Improper Cost Calculation
You will have a variety of costs when you buy an investment property. These include closing costs, homeowners insurance, vacancy insurance, maintenance, and more. It is entirely possible to have a negative cash flow rental when a variety of factors contribute to that. You also should add in the time and effort starting with your real estate listing search and including dealing with your tenants and making sure your repairs are taken care of.
3. Boise Market Misunderstanding
Yes, you can make money in investment right now in Boise, but since factors are favorable, many others are trying to do the same thing. Competition for the popular rental house--$150,000 with three bedrooms--is fierce, with multiple offers. This drives the prices up. Also, don’t think that you can find a good rental anywhere in Boise. Consider where your property will appreciate most and vacancy rates per area before you buy a house you find in real estate listings. You will want a realtor with experience in selling investment properties to be in your corner.
4. Today’s Boise Investing Realities
Buying an investment isn't what it used to be. You should expect to put 20% down, as it is much harder to get financed after the market crashed. You should have cash reserves available for the rental property if for whatever reason it doesn't pan out like you expect. You shouldn’t expect that appreciation will go back to how it was pre-2008. That wild growth wasn't sustainable. Housing values should grow, and probably will, but unstable markets don’t guarantee anything.
Should you look at real estate listings to find a good property? Yes! This seems to be a great time to buy a couple properties, but don’t get so excited that you forget common sense. Startpackingidaho.com and your agent want you to have a positive home buying experience, and by working together you can add wealth in a smart way.
Have all your Real Estate investment questions answered by the calling the Hughes Group at 208.571.7145