Investing in real estate can work if you do your homework properly. Just like people who research companies before purchasing stocks, you need to research your real estate market.
I myself, have never been good at predicting the stock market, or shares or any of those higher finances, but many of my friends, stick like glue to their computer and play the stock market for fun and profit.
The only problem is, I see a different mood each day, depending on how well their stocks went. I personally can not do that, so my husband and I felt we should invest in the one thing we feel pretty confident about. Houses.
My husband can swing a hammer and do many home repairs, since his dad taught him many of these things growing up. I can paint, strip wallpaper and shop... When our kids were young and we were trying to find a home, we were horrified at what was being offered on the market, and for what price.
We had lived in a cheaper rural area, and due to a job transfer, had to move closer to a city. We obviously had been sheltered where we were, and realized just how much that saying the agents use. "location, location, location" played in the price of housing.
Investing at that time was scary, as the interest rates were high, and many of the house we looked at, needed a lot of work. We had sold our rural house and realized, even though we had made profit, we were barely going to have enough for a down payment on one of this "flimsy boxes" they called houses. We were horrified.
We did our best, and found one just outside of the city. Not our favorite, it was cheek to cheek with the other houses, but we decided right then, that we had to look at investing in housing in a different light.
Our kids were young, 5 and 3 years old, and my son was to start school. So, we decided to try and stay in the same area as his school, and not unpack too much stuff, mostly the kids belongings, and then look for a lot, sell this house in a year, and build our own house.
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(price as of Mar 20, 2016)
Lived in a RV Trailer While Building This House
(Note: I wrote the above book to help others understand what they are getting into if they live in a trailer while building a house!)
A year later, we managed to sell this house and actually made a profit, enough to buy a building lot outright, and a old trailer to live in while we built. We hired most of it out, but we were our own general contractor, which saved us a lot of money.
We raised our kids, in this house, but were always keeping an eye on the housing market, tried to pick the right year to sell, and then bought another lot and built another house.
Our kids are grown now, and we have been in a house that we love. But wanted to do some more investing. So, even though we love country living, just outside of town, we decided, that if we wanted to invest in real estate, we needed to be fully aware of that "location, location, location" slogan the agents use. We decided to purchase a house, that needs renovations or TLC (as they put in the ad) and then rent it out.
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Investing in Rental Property
We found a house to fit the bill, and are now in the process of renovations. It is the first time we have been able to purchase a house while still living in our own house. It is nice renovating, and not having to live in it at the same time!
My husband was looking to invest in another rural property, but I said, if we want to get a good tenant, then we need to be in town, close to schools and shopping. Sure enough, we are already getting tenant interest.
Investing in real estate, and hanging onto it for rental investment, takes some homework. You really should have a good location on town services to get the best rent. We are planning on making this house nice. We are updating all the fixtures, kitchen, and floors. It was built in 1972 and the last update looks to be 1980, so it was time.
Plus my theory is, if you make it nice, then hopefully (not always though) you will get nice tenants, and less to go wrong in the house.
We have another house, in another city that has good tenants, and that house pays for itself. Investing in real estate, especially rental property investment, if done right, can net you a good income, as well as paying off the house. We hope, by making all these upgrades now, that we are increasing the value, and hope to have less go wrong with the place when tenants move in.
It can be risky, but so is the stock market, so I say invest in what you know or feel you would like to learn about, and you are more likely to win. We chose to invest in real estate.