What is Real Estate Investing?
Put your money to work. By investing today, you’ll see returns tomorrow. Real estate investing revolves around making money from a tangible piece of property. Reaping rewards off of residential and commercial properties is a centuries-long tradition and in modern day has proven to be an attractive option for investors— given its substantial and often lucrative results.
How Does It Work?
Making money from properties can be a much more stable endeavor than say, the stock market. People feel more comfortable with the fact that a property is tangible investment that can be touched, seen, renovated, and improved. The two-way deal is also relatively straightforward: you do the property upkeep and maintenance and you receive a monthly pay. There are actually a few ways of generating income from real estate. The two main ones include:
-Real Estate Appreciation: This applies to properties that increase in value over time. Usually —especially in highly demanded areas— properties will go up in value as development and growth happen around it. Someone looking to make this type of investment should spend some time studying that particular market, population, demand, and other factors in that area that can have an impact on a property.
-Rent: Also known as cash flow, which refers to income being made through the collection of rent in an apartment building, office building, rental houses, and other rented spaces. For an investor this requires the purchase of a real estate property, maintaining it, keeping it up to code, etc, in order to bring in the income.
When it comes to rental properties, there are several categories. Each has their positives and offers varying advantages. In general, there are three types of real estate that people can invest in:
- Residential: These are properties where families or individuals live and pay a monthly rent in order to use the property. Usually people enter into a contract and commit to a certain length of time with a certain rental amount.
- Commercial: This type of real estate refers to office buildings or rental spaces where businesses or companies go into a contract and agree upon a monthly rent amount.
- Industrial: This type of property refers to warehouses, storage units, distribution centers, or other types of properties that house industry or bigger business operations.
Diving Into the Process
Real estate markets can produce considerable returns, but they are an endeavor that requires some patience. The more you know and understand about the nuances of the market, the less likely you’ll find yourself in the midst of a bad decision. Summus Realty is here to guide you towards your particular real estate goals and to connect you with trusted lending partners. We make sure that you’re entering a sound and feasible investment suited for your needs and capacity. Here are a few things to keep in mind:
- Perform an honest inventory of your resources.
- Decide the kind of property you are looking to invest in.
- Due a cost analysis, estimate, and assess potential losses.
- Evaluate the market in the area.
- Find a trustworthy agent that can find you quality properties and help guide you and broker a deal.
- Use a projected rate of return or capitalization rate.
- Use a trusted lender.
What To Expect
You want to have a strategy, but also be willing to take some risk. The real estate market offers vast potential for growth and substantial returns, but there is a waiting game involved as reaching your end goal can often take some time. When becoming a first-time investor, you can expect a lot of new information and many hours of hard work as you manage the various tasks involved with owning a rental property.
Is Real Estate Investing For Me?
One of the most common questions people ask us is whether real estate investing is a feasible venture for them. This, of course, depends on a variety of factors. Everyone’s situation and goals are different, so there will be some variance depending on your particular circumstances. Here at Summus, we measure our success by the success of our clients and therefore make every effort to provide you with the best properties, the best research and market data, and unmatched expertise in the El Paso market. Here are a few things to consider:
- Investing can be a game of patience. Make sure you are ready to wait for the returns and put in the attention required.
- Assess your resources. Be realistic in terms of what your current resources and income are so that you don’t find yourself in a bind.
- What are your financial goals? What do you want to get out of your investment?
Call Summus Realty to Find the Right Properties
Whether you are looking to acquire a residential or commercial investment property or a new home, Summus Realty can help you climb to the top by finding the right fit for your goals, your budget, and your future.
Contact a Summus Agent Today
Our real estate agents are not only the best in their field —with extensive knowledge and expertise in the local market—but they are out there fighting for you, seizing opportunities to improve your future. Because when our clients succeed in reaching their real estate goals, our community thrives and prospers. That’s why we’re here. Give our agents a call at 915-494-9069.