How to Buy the Right Investment Property

How to Buy the Right Investment Property

  • HTX Group
  • 03/31/22

The stock market has been quite volatile recently, driving many investors to rethink their overall strategy for growing their money. They are making moves into the cryptocurrency space and real estate investing. If you are following investment trends, you know that cryptocurrency is a roller coaster ride of ups and downs. Real estate, however, is one investment area that has been consistent across decades. With the volatility in the market and the uncertainty of cryptocurrency, it is the perfect time to buy property, and Memorial homes for sale offer exciting growth potential.

The housing market exploded after the start of the pandemic in 2020 for many reasons. Urban dwellers were fleeing the city for a more suburban life with more space. Second-home purchases increased significantly due to an influx of cash from investment growth and parental gifts. Lower interest rates and the flight from urban areas drove prices up by 30% in some areas. The market is cooling slightly in 2022, making it the perfect time to add a property to your portfolio. Memorial townhomes are readily available to purchase at a competitive price with the potential for monthly cash flow and future gains.

If you are an investor and the current volatility in the stock market is not for you, real estate is a smart way to grow your investment. Investing in Memorial homes for sale will provide you with monthly cash flow from rental properties and equity growth from the appreciation value of your investment. Having monthly cash flow allows you to take advantage of the historic low-interest rates to finance the property. With the cash flow paying the monthly mortgage, you can have recurring monthly revenue as long as you own the property. When you decide to sell, you will realize the gains from the appreciation value of the home.

Selecting which property to choose for your investment can be challenging as you want to grow your investment and not realize a loss. Timing the purchase, knowing the location, deciding which type of investment property is best, and getting the best price all factor into the decision-making process.

Is now the time to purchase real estate?

The Federal Reserve is poised to increase interest rates to help stabilize the economy and flatten the inflation rate. This rate increase will likely be a small fraction of a percent, but it is a raise, nonetheless. If you plan to use a mortgage lender to finance your investment, now is the time to take advantage of those lower rates.

Over the next year, there will be increases, and they will impact your monthly carrying cost of a mortgage, cutting into your monthly profit margin. You will also pay much more over the loan term as a fraction of a percentage could cause you to leave thousands of dollars behind in interest.

Choosing the right location

Location is one of the most crucial factors in selecting the right investment property. As with any investment, you must balance the risk and rewards. You may be tempted to purchase a home in an up-and-coming city, but what if that city never grows to become the next “hot” spot to live in? Your investment could become flat, or worse — you could lose a portion of your investment.

Choosing a stable neighborhood will require a more significant initial investment, but the risk of losing that investment is minimal. Memorial is a neighborhood of Houston, Texas, and an extremely well-rounded area for an investment property. The suburban feel, surrounded by towering trees, extravagant homes and estates, fantastic parks, nightlife, shopping, and dining, are just a few of the many reasons people want to purchase homes in Memorial.

Top-ranked school systems allow families to feel comfortable knowing their children are getting an excellent education that prepares them for the future. Recreational activities will keep everyone in the family active indoors and outdoors. Memorial gives residents the feeling of living in a quaint small-town with all the amenities of city living.

Which type of property is best for my investment?

You have decided it is time to purchase based on the current market, you have found the location, and now you must determine which type of property will be the right fit. Strategies around real estate investment include rentals, flips, and hold to sell later. Each option offers pros and cons and depends on how much you want to be involved in the daily functions of a property.

Like those found in Memorial townhomes, a rental property will give monthly cash flow, but you may have to be hands-on with repairs and deal with tenant issues. You could choose to hire a property manager for these tasks, but that will cut into your monthly revenues. Purchasing a home to flip sounds like a quick method to make an immediate return on your investment. These options are great if you have the knowledge and time to do the work.

Purchasing a home to hang on to and sell later is another strategy. You could use the home for personal uses, such as a reprieve from urban life, or consider short-term rental options if you have a luxury estate. Determining your goals, time constraints, and overall investment strategy will help you narrow down the search. Work with a great agent to further assist you in finding the right property.

Bidding strategies for getting the best deal

After all the pieces have come together and you’ve found the perfect home to start your investment journey, it is time to put in an offer and close the deal. It is best to work with an experienced agent during this process as they will have an in-depth understanding of the local market and the best possible bidding strategy. Negotiating not just the price but, in some instances, the home's contents will help you realize the most significant long-term gains on your investment. Bidding too low could cost you the home you worked so hard to identify. Too high of a bid could cause you to leave behind money.

Investing in real estate is a phenomenal way to grow your money and have some fun along the way. Making smart decisions will allow you to realize the most gains and mitigate the potential risks of investing. If you’re ready to buy a Memorial townhome or single-family property, reach out to one of the trusted local agents at the HTX Group for expert assistance today!

Work With Us

Whether helping first-time homebuyers, move-up buyers, investors, or empty nesters, the HTX Group demonstrates unmatched service, a tenacious work ethic, and clear communication that makes every client feel like they are their only client. If you are ready to start your buying or selling process give us a call. We're happy to answer all your questions.