Real estate is a common investment vehicle, and Denver is a great market. Although real estate presents numerous opportunities to get a great return on your investment, be aware that property investments are far more hands-on than other investments such as stocks and bonds.
Real estate investments work in a couple of ways, and the Masters Real Estate Group can help you determine which investments could be right for you and your investment goals.
Some investors like to buy properties at the best possible price, make small- or large-scale improvements upon them, and “flip” them for a profit. Others pursue a “buy and hold” strategy, and purchase homes, duplexes or other types of property with the purpose of keeping them for a longer period of time and using them to generate passive income.
Both strategies can work for you, depending on your budget as well as your individual investment and portfolio growth goals.
What are the best types of investments?
There are two major factors to consider when making a decision to invest in real estate. In the short term, you need to crunch some numbers and be confident that the property you purchase will produce enough income to cover the expenses associated with holding the property. Your long-term strategy should involve purchasing a home in an area that has historically appreciated in value, or an up-and-coming area that will do so in the near future.
Choose your investment property carefully. Our agents at the Masters Real Estate Group can create a comparative market-value analysis of any home or property you’re considering to see how the price and amenities compare with those recently sold homes in the area as well as other properties on the market.
We can prepare a historical analysis showing how homes in the area have appreciated over time, and we can find out if the neighborhood has a glut of rental properties or if the property you are considering will be one of the few that future tenants have to choose from.
What is involved for a beginner?
Buying an investment home is no more complicated than buying your own home. You’ll want to ensure that you prequalify for a mortgage, which gives you better standing with the seller when you make an offer.
You can work alone or with one of our agents to find a home that you’re interested in buying and do your research regarding the comparative market value on your own or with us. Just as with any other real estate purchase, you’ll make an offer, come to an agreement with the seller, sign contracts, and close on the home.
Should I invest in out-of-area homes?
We recommend that new investors seriously consider buying property near their own home. Dealing with tenants and service providers is much easier when the property in question is within driving distance. Only when an investor has gained enough experience managing the particular set of challenges that comes with owning an out-of-area property should an investment property in another area be considered.
One important thing to keep in mind when creating a real estate investment strategy is that real estate trends vary from area to area. While it might be a buyer’s market near you, in other parts of the state or country, or even across town, homes may be receiving multiple offers. We can help you make sure you know what’s going on in any area before you consider investing.
Think you’re ready to make the leap and purchase an investment real estate property in Denver or beyond? Get in touch with us here at the Masters Real Estate Group.