Investors /On February 6, 2013

Choosing the Right Investment Strategy

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There are a number of different approaches to building wealth through investing in real estate and it is important that you choose the right investment strategy. Choosing the right investment strategy will depend on your investment objectives, as well as the current market conditions in the area that interests you.

Investors everywhere are frustrated with volatile stock market portfolios. At the same time, our local real estate market offers many great buying opportunities. Now is the time to consider re-balancing your assets, and adding some investment property to your portfolio.

LONG TERM WEALTH BUILDING

Consider this example: Less than a total $22,000 investment will purchase a $175,000 property. That’s a 10% down payment, plus all your closing costs and prepaid expenses. If you choose a 30 year mortgage, your monthly payments will run approximately $1,350, which includes principal, interest, taxes, mortgage insurance and homeowner’s insurance (6.75% interest rate, 6.90% APR, zero discount points and zero origination fee).

The right property will rent for $1,300 - $1,450 per month, which leaves you room to pay a professional property manager (most charge 10-12% to handle everything from finding tenants, securing leases, billing, and overseeing any repairs) with only a slight negative cash flow. The best part is that your tenants are making the house payment for you!

Consider the advantage of that investment: assuming that you hold the property for 5 years, and it appreciates an average of 6% annually, your initial $22,000 investment has returned over $60,000 in equity, and is continuing to grow!

The key is finding the right property, where you will have sufficient demand to keep it rented, as well as to be able to enjoy steady rent increases. The number of bedrooms, square footage, condition, and of course, location are all factors that determine what makes a good investment. The key is finding the right property, and your real estate agent holds that key!

An experienced investment expert can help you evaluate whether government owned properties, multi-family properties, or single family homes make the most sense given your investment goals and the right investment strategy for you. Your agent can also help you find competitive mortgage money, and help you analyze the potential return on making repairs and improvements. Whether you plan to hold the property until it is paid for, or take a more speculative route and hunt for bargains and then flip them for a quicker profit, a relationship with a good real estate agent is invaluable. Your accountant can also help with important advice on how to capitalize on the tax benefits available to you when you purchase investment real estate.

Email us at thesavvyrealestateinvestor@lizmoore.com, and we’ll arrange a complimentary initial consultation to help you choose the right investment strategy.

The Liz Moore & Associates’ Savvy Real Estate Investor Team specializes in helping experienced and hopeful investors alike build wealth through their real estate portfolios in Newport News, Hampton, York County, Poquoson, and Williamsburg, VA as well as surrounding markets. They are experts in helping you find great deals on short sales,foreclosures, HUD properties and REO’s. Our Investment Coaches are experienced at helping you buy for fun and profit, flip real estate, build long term wealth, or rent your property as an investment. Whether you are looking to purchase investment property for the first time, or to continue to expand your portfolio, you will find The Savvy Real Estate Investor Team to be your greatest asset.

Lynnette Tully

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About the company

Liz Moore & Associates is a boutique real estate agency renowned for having the region's top agents, with extensive market knowledge and local expertise that is only achieved through relentless training coupled with Liz's extremely high standards for professionalism. When you're buying or selling a home, experience matters.