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The Secret to Financial Security Through Owning Real Estate

Single Family Investment Real Estate

 

Owning investment real estate is one of the most proven paths to wealth and financial security.  The biggest reason for this is one word: Leverage.  That’s right, if you own a $260,000 investment property, which is the median price for a home in the United States, and your mortgage is either covered, almost paid for, or exceeded by your rents, and the property appreciates just 5% a year, the return on investment can be amazing.  5% appreciation means more than a 50% return on your money each year.

Considering the anemic return on money in the banks and treasuries, this makes investment real estate a truly transformational financial decision.  That being said, there is a major difference between buying and selling investment properties the right way and the wrong way.

This information is intended to provide you with an overview of how to select the right real estate agent, as part of your investment team.  It is important to realize that the words real estate encompass igloos at the North Pole to skyscrapers in Manhattan and everything in between.  Thus it is not realistic, and potentially damaging, to just assume that all real estate professionals are equally qualified in representing the interests of those who invest in real estate, over and above their personal residence.

Here are some of the questions and qualities that you should look for when selecting investment real estate accomplished agents:

  1. What is their specific background in helping investors buy and sell investment properties?
  2. Do they have a database of prospective sellers, types of properties, and recommended locations?
  3. Do they prospect for investment properties for their clients?
  4. Do they specialize only in single and two family investment properties, or multi unit buildings?
  5. Do they possess a “concierge team” of relevant vendors, legal, financial, and maintenance related professionals?
  6. Do they offer (at a reasonable rate) property management services or work in conjunction with property management companies?
  7. Do they possess deep analytic market place data and trending and trajectory information?
  8. Have they developed networking relationships with other investment active real estate agents?
  9. Do they provide staging services for free or at a nominal fee?
  10. Have they developed relationships with REO departments (Bank owned properties after foreclosure) and/or short sales managers?

A major reason why many potential investors are discouraged from seizing upon the immense financial potential rewards of investing in real estate is the concern over property management, even at the single family and two family home level.

Here is what you might look for when selecting the right real estate agent to work with as you look to either buy or sell an investment property:

  1. Will they provide you with quarterly reviews covering:
    • change in quarterly pricing of local property values
    • the demand for rentals in the last quarter
    • the demand for investment properties in the last quarter
    • days on the market (DOM) for both single family homes and investment properties by quarter
    • absorption rate changes that quarter
    • any change in interest rates that quarter
  2. Does the realtor have, as part of their team or company or themselves, staging professionals?
  3. Do they possess a concierge service of local vendors and trades people?
  4. Will they commit to periodic drive-bys and how often?
  5. Will they commit to sending photos of your property (if you are out of area)?
  6. Do they have a specific marketing plan for marketing investment properties?
  7. Do they have experience in marketing multi-unit buildings?
  8. Do they have experience in marketing seasons and even one night rentals in resort areas?
  9. Will they arrange for winterizing (where applicable) or spring cleaning?
  10. Are they familiar with 1031 exchanges?

Investing in properties can favorably change one’s financial fortunes, and it does not mean buying skyscrapers. I am well trained to assist you in residential investment real estate. Call or text me at 916-788-8822 or email me at chris@dematteiteam.com.

For any Real Estate Advice that pertains to financial, legal, or tax related information please contact the professionals in those fields. The practice of Real Estate representation can vary by state. Ask your Real Estate Representative for agency information pertaining to your state and company.