I've made it to West Point and spent a great night last night catching up with the old Army Football players that I get to see once a year. One in particular wanted to talk with me as he was starting a small company up north with the intent of buying investment homes. Considering I had just spent four days with an gentleman who is starting a Florida real estate investment trust (REIT) for the very same reason, we had a lot to talk about.
This might not seem like big news to most readers, but I can tell you that it really is exciting to me. People are seeing the value again in real estate, and I think that is the first real sign of recovery that I have personally observed. Even though his interest is not in our local market, anything good happening in housing is good for the Tallahassee real estate market. And the fact that a REIT has targeted Tallahassee with its plan for buying investment homes could equate to phenomenal news for our market.
Buying Investment Homes Safely
The key to buying investment homes without subjecting ones self to great risk is to have a simple plan that is executed at the right time and in the right market. Here are some simple points the plan should consider.
- Stable Predictable Growth In Local Population – Safe real estate investments come from “knowing” the end game. In order to do so, one must own real estate in an area that has a growing population. This does not need to be explosive, just recurring and consistent.
- Stable Long-Term Economy – If an investor is buying residential real estate, it would be prudent to do so in a market area that will provide jobs for the long-term. Stable jobs means a steady stream of tenants and homebuyers.
- Historic Records to Demonstrate Future Stability – So much information is available these days, a safe investor will look at long-term records to verify the stability of the chosen market area.
- Flipping Real Estate Is A Job – Too many people think real estate investment involves buying a property, fixing it up, and then selling it for a profit. I disagree. Flipping real estate is a business, not an investment. Many people do it, but nobody can compete as a passive investor in this full-time business.
Joe Manausa, MBA is a 26 year veteran of real estate brokerage in Tallahassee, Florida and has owned and managed his own company since 1992. He is a daily blogger with content that focuses on real estate analytics and providing his clients with a tactical advantage in today's challenging market.