Real estate is an asset whether it is land or property, and as an investor, you expect its value to appreciate over time.
As time progresses, the number of ways to invest in real estate should progress as well.
For instance, there are real estate investment groups that own large condo or apartment complexes. Investors can buy any units available while the investment group manages the property.
There is also real estate training which consists of buying and flipping a property for profit. On the publicly traded side, investors can pursue real estate trusts.
Lastly, there is old-fashioned real estate investing where you hold onto an asset you’ve acquired and you rent it out. Regardless of which type you choose, research is required if you want to succeed.
Establish an Investment Process
A key factor to consider when investing in St. Louis real estate is to have a process. People sometimes see an opportunity in real estate and are quick to invest without considering all the necessary information. We have made a list of some things to consider:
- Real estate knowledge
- Build a plan
Questions to Ask Yourself
Before you start building your plan, there are some questions you should ask yourself:
- Does an investment in real estate make sense for me?
- Do I have enough time and capital?
- Do I have clear goals for this investment?
- Do I have a process or checklist for investing in property?
- Is the area somewhere I want to invest in?
You always have to think demographics, vacancy, crime rate, and schools in the area. Other things to consider include the age of the property and the cost of renovations and upkeep. Think about whether you have the time, skills, and resources to maintain the property. Most first-time investors wisely hire a professional property management company.
Real estate investors can receive significant benefits such as tax deductions and consistent cash flows. Using a property management company can assist you in achieving that.
Investment Benefits and Drawbacks
Investing in real estate comes with benefits that few other investment options offer. You get a tangible investment compared to stocks and bonds. Additionally, the tax benefits can be substantial. When you invest in real estate, you are in control of what changes you put into your investment. Real estate value typically appreciates over time making real estate a long term profitable investment.
Though the benefits are substantial, there are still some drawbacks associated with real estate. Some of those being:
- A property is a non-liquid asset
- Vacancies damage your cash flow and profits
- Benchmarking your property is more difficult than stocks and bonds
Hiring a St. Louis Property Manager
Most investors become landlords but do not want to deal with tenants. Real estate can be a tricky investment for a lot of people. Some people have the money and desire to invest in properties but do not have the time and knowledge to take care of them.
This is where a property management company comes into the picture. Your property management company should offer everything from leasing to maintenance services. Look for a company that will help you get your property ready for the market, find a qualified tenant, collect monthly rent, and respond to routine and emergency maintenance.