If you have ever considered investing in real estate, NOW is a great time and Buffalo is an ideal market. Interest rates are at historic lows and home prices are very affordable. Our city is on an undeniable upswing with the continuing waterfront development, amazing new restaurants, medical research and care, and so much more. It is wonderful to see and I’m so proud to introduce our home to out-of-towners and re-locators. Understand that there is more than one way to invest in real estate; and, as you consider your options and choose a path, think about the following questions:
- What are your goals? Immediate income/positive cash flow? A quick flip for profit? A project or fixer-upper for rent or resale? Long-term portfolio-building/retirement security? The answers to these fundamental questions will steer you in a number of different directions. So, make sure you have a clear idea of what you are looking to accomplish.
- What kind of liquid cash do you have available, and what are you willing to spend? Keep in mind that if you’re in the foreclosure market or interested in buying a fixer-upper, you may not be able to get financing and could be looking at a cash sale. If you do plan on financing with a mortgage, keep this in mind — if you’re not planning on living in your investment property you will probably be required to put at least 25% down. Banks will vary in their requirements, but 25% on a non owner-occupied property is typical.
- Where do you want to buy? This is a great question for us to discuss to be sure that you make a smart investment. Property prices, rent-ability, and property taxes are just a few of the factors that could make or break your investment.
- What will be your level of involvement? Obviously, a standard 2-4 unit multi-family home should be easier to maintain and manage than a large apartment or commercial building. Are you able to do most common repairs or will you be hiring a property manager/contractors?
- What is your expectation for return on your investment?
Take a look at the video below from Greg Rand of OwnAmerica. Greg is an investment expert – he does a regular online video series and is a frequent guest on televised national talk and news shows. If you are interested in real estate investing, certainly look him up and listen to what he has to say; but, certainly keep in mind that given the vast differences between the national market and our own local one, his (or anyone else’s) advice does not always apply to us 100% word-for-word. This short segment addresses the question: “Residential or Commercial – Where is the Better Investment?”