Real estate investments come through a variety of different options. However, whether it is a vacation property, a first home, an early retirement house, or a rental property that you find appealing, real estate investments are all the rage, and are quickly becoming one of the safest investments available, especially in our less-than-perfect economy.
One of the most accessible investments for the average American is more common than most residents realize. A first home offers a lot of advantages over renting. Building up home equity, utilizing tax advantages, and appreciation in home value are only some of the things that make common homes into great investment opportunities. The best market to look for when buying a home is a stable one, with average rates of appreciation. A stable market will provide a safe investment a few years down the line.
Vacation properties or second homes provide an excellent investment opportunity for individuals with the extra income to spend on another property. However, vacation home buying is often fraught with mistakes when it comes to the investment value:
? It is a common error to believe that locations with extreme demand and skyrocketing rates of appreciation are the best for investment. Don't allow yourself to be fooled. Markets with unreasonable demand and unaffordable home prices like these will be unable to sustain this type of growth. Unstable markets run the risk of leveling out, or worse yet, crashing. Your best option is a stable market with average rates of appreciation, roughly around 5%.
? Buyers of vacation homes often pay above market value for the property. While this relates directly to the markets where vacation homes are most popular where the competition drives prices far above listing price, it is still something within the hands of the buyer. Choose an area with less of a seller's market, and never pay above market value if you hope to make an investment out of your property.
Buying a rental property is often a real estate investment for an entirely different reason. While most properties become an investment through the resale value, rental properties generate income for the owner during the period of ownership. The same guidelines apply as with buying other realty properties, but also remember that the best rental property owner is one with the time to invest. Experts warn that you should only buy a property when you are willing to put years into your new rental property. It is also important that you have extra funding when going into the deal. You will probably need to make renovations, updates, and repairs as time goes on.
Regardless of your reasons for deciding to purchase an investment property, the options are numerous, and opportunities are growing with time. Of course, it is important that any prospective buyer consult with a real estate professional, finding a qualified buyers agent can save an individual from making the costly errors often forgotten when purchasing a real estate investment property. Of course, the best reason to buy such a property is because you have the time and desire to enjoy, and the desire to make an average house into a great home.
Inside Real Estate in a network entirely devoted to real estate information. Our staff of nationwide writers has provided a library of over 25,000 real estate articles. Inside-Real-Estate covers several topics from the basic "how to's" of real estate to city specific real estate information.
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