Investing in real estate is a great way to provide some extra income for retirement. When we downsized our home and moved to Grand Rapids, we had some extra cash on hand. The equity that we had built up in our home was more than enough to fund our much smaller loft.
We considered both flipping houses and investing in rental property. So far, we have done both.
Steps For Investing In Real Estate
- Find A Great Up and Coming Location: When we began looking for houses, we paid close attention to the location of nice restaurants and shops. We did our research on the premium neighborhoods and looked beyond to new potentials. The first home we purchased is not in a premium neighborhood, yet! It is located only a couple of city blocks from the nicer homes. There was evidence of improvements on the street, with several homes that had been redone. Our favorite part of this home is that it is walking distance from some of our favorite restaurants and coffee shops. It is turning out to be our most profitable rental property.
- Take Your Time and Get the Lowest Possible Purchase Price: It’s a little easier to take your time, to make a purchase, when the home you are looking for is not your own residence. When emotions get involved, it’s more likely that you have the potential to overspend. We looked at a lot of homes that didn’t make financial sense before we found one that did.
- Consider Multi-Family Homes For The Most Return On Investment: Our second home purchase was a multi-family near colleges and hospitals. This type of investment is great for renting to college students. Again, this property has been a great money maker for us.
- Look For That Diamond In The Rough To Flip: After having a couple of rental properties, we decided to look for a project to either flip or rent out. The home we found had good bones but needed a total remodel. We purchased the home for a steal since it had been empty for years and was being sold by the estate. It wasn’t just the purchase price that we liked about this home. We had seen another home for around the same price. It was the potential! This home had tons of character with wood floors throughout, built ins, and beautiful trim work. The location is also on the same street as our first purchase. We also have experience with building our own homes so felt confident with the process. Luckily, we could do a lot of the work ourselves and contracted out what we couldn’t.
Is Investing In Real Estate For You?
If you are wondering if investing in real estate is for you, check out this additional information at The Balance.