If you are not sure where to invest, you may want to reconsider investing in the stock market and look into investing in real estate. Some investors are still fixing and flipping properties but holding onto properties in this market seems to be more stable. Vacancy rates are at their lowest in Colorado Springs and rentals are being snagged up very quickly since there is such a demand for them and as a result, rents are also on the rise.
Many homeowners have lost their homes to foreclosure or performed a short sale due to hardship with the housing crisis and difficult economy we have been experiencing. The credit of those who have gone through a short sale or foreclosure is negatively affected so purchasing a home is out of the question for a few years. These folks still need somewhere to live and those who don’t move in with friends or family may consider renting as another viable option.
Home prices continue to remain low; this couldn’t be a better time to invest in real estate! If you are interested in purchasing an investment property, please read a few pointers below:
1.) You will need at least 20% down unless you purchase an income property such as a fourplex and live in one of the units (FHA and VA financing is available)
2.) Purchase a home that is in a convenient location of Colorado Springs (e.g. near military bases)
3.) Don’t forget to keep resale in mind even when buying an investment property; you never know if you may have to sell it sooner than you anticipate
4.) Check rents in the area to ensure the property you are interested in has potential for cash flow. If the numbers don’t make sense, why invest?
5.) Figure in costs for repairs and remodels if you purchase a distressed property. Many of the bargains in town are in need of some TLC so be prepared to get your hands dirty or pay a good contractor.
Being a landlord can have its challenges; do your research before taking on the responsibility. Plan for emergencies and decide whether you prefer to hire a property management company to handle calls that may come in the middle of the night. If possible, have a savings account to cover for unforeseeable repairs. Make sure you have a thorough lease protecting all parties. There is no way to guarantee that you will receive the rent each month but running a credit check on applicants will provide additional information you may need to know (e.g. collections).