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13 Smart Real Estate Investing Tips from Successful Investors

13 Smart Real Estate Investing Tips from Successful Investors

September 9, 2022

Properties in Costa Rica

As the pandemic peaked and businesses stopped, many experts said that the real estate market would be one of the last to return to normal. After the pandemic, it surprised everyone with how well it had done.

The road to wealth is frequently meandering and investing in real estate does not come with a map. However, you can take steps to set yourself up for success and place yourself on the correct path. A wonderful place to start is by paying attention to the best tips for investing in real estate from experts and prosperous investors.

We got thirteen property investment advice or tips from professionals in the industry. It doesn’t matter if you are new to the industry or buying your third rental property, you must follow these steps to succeed in this industry or get a property investment service. Without further ado, let us get started.

Why Invest in Real Estate?

Risk and preparation are involved in real estate investing, but the payoff can be substantial. Some of the most compelling arguments in favor of buying property are listed here. (Remember, growth in value and income is not assured. The more you know about the houses and areas you are considering, the better your odds of making a profit). Here are a few reasons people invest in real estate.

Continual Cash Flow

Owning a property increases what you receive monthly. It does not matter if you want to invest in a commercial or residential area, the potentials are high. You can lease your property to tenants. You get rent payments monthly.

Excessive Profit

You can sell your rental properties for significant profit if their value rises with time. You must choose the right real estate business to get those high profits.

Stability over Time

You can hold a property for several years while waiting for it to appreciate because it is a long-standing investment. As you wait for the property’s value to increase, you may also make a monthly income by renting out your real estate.

Tip 1 – Find rental homes in areas that are growing

Rental properties are a fantastic way to become engaged with real estate investments. Look for them in new neighborhoods. Developing communities provide tax breaks and room for growth for prospective buyers. Those who invest in real estate in upcoming areas increase their profits and ensure their revenue matches their costs.

Tip 2 – Diversify your investment portfolio

People often say that the best property to invest in is the one you already own. Even though it is essential to know the area where you are investing, you limit your opportunities to make money when you look for small areas.

If you think about investing in other cities and states, you will have a broader range of options and, in the end, better chances. Investing in a wide area also gives you more ways to spread out your money and protects your portfolio from the fluctuation of local markets.

Tip 3 – Don’t overstretch yourself

You can be highly profitable for an extended period and still go bankrupt if each rental is heavily mortgaged. You will have a decent mix of safety and stretching resources if you maintain some of your rental homes for free. If you execute it correctly, a few longer-than-expected openings or cash flow dips do not have to spell the end of your career.

Tip 4 – Conduct your research

Your reputable and compensated experts may advise you to avoid holding real estate in your portfolio altogether in many situations. They frequently offer the same stale justifications, such as being “illiquid” or “very management-intensive.” Depending on your circumstances, they may have merit, but that is not the primary justification they want you to avoid real estate.

You do not pay stockbrokers to invest in real estate. They have no incentive, no commissions, and no work to do. That is, except they wish for you to buy a pricey, non-traded REIT, in which case you will immediately understand their genuine motives. You must conduct your own research to determine the future cash flow in the real estate industry.

Tip 5 – Consider renting a single-family home

Your best chance of finding the right tenant is with single-family homes. Everyone would like to have a home of their own. Some people cannot or do not want to own property.

Tip 6 – Have several escape routes in mind

Another tips for investing in real estate is to never purchase a home unless you have several departure options. Consider flipping as an example. By purchasing properties with substantial quality numbers, you can reduce your risk factors if you are starting or do not have much spare money.

If you are investing in flips and the market collapses, but the property might generate a negative or level cash flow if rented out, you will lose a lot of money. You can either create wealth by maintaining them as rentals or reduce your risks when things go wrong by flipping starter homes.

Tip 7 – Contact escrow to complete your deal

When you start escrow, the deal is not yet finalized. If you are purchasing off-market, the seller may be a little worried about the transaction and if everyone involved is a real estate agent.

Introduce yourself and let them understand that you will draft the paperwork as soon as the escrow/title firm contacts them. The seller will feel more secure because of the third-party confirmation.

Set the anticipation up front that you would check in on the situation regularly during the escrow term and be sure to do so.

Tip 8 – Learn about your market

It is crucial to research and get expertise in your chosen market before making a real estate investment. You can recognize the current market situation and make plans if you are well-informed on current trends, including any drops or gains in average rent, crime rates, income, and interest rates.

Constantly estimating and anticipating market changes will make you a more successful real estate investor.

Tip 9 – Expect vacancies

You want to prevent a vacancy gap in your cash flow unless you have significant finances. The only way to achieve this is to add it to the cost of transporting the asset. Most property owners must assume that not every month of the year will bring in money.

For some, that translates into a 2% decrease in sales, while for others, it may represent a 10% decline. The trick is to evaluate the property and the renter type and then account for the revenue shortfall you should anticipate yearly.

Tip 10 – Think about investing in non-traditional real estate

Never forget that buying single-family houses or apartment complexes can both be profitable real estate investments. You might make investments in warehouses, industrial space, storage facilities, and office buildings. These all bring in rental income.

With a triple-net lease, where the tenant is responsible for basic insurance and paying the property taxes and upkeep, you might be able to lower total costs when renting offices and industrial facilities. Your investment then generates consistent cash flow with minimal out-of-pocket costs.

Tip 11 – Think of your investments as businesses.

Investing in real estate is a business; like any other business, it needs to be carefully planned, carried out, and managed. People who are good at every level run the best companies. It is one property investing tips you should never forget as a newbie.

Those who do not realize this will have trouble or even fail. No matter how big or small you want to do your real estate investment service, you must run it like a business to succeed.

Tip 12 – Create a budget and a timetable 

A general rule of thumb to apply if you are a new investor is to reserve at least 50% of your budget. When you renovate properties, one problem can often lead to another, and your expense usually ends up being greater than you had planned.

A leaky pipe, for instance, might need to be replaced, the mold damage cleaned up, and the drywall replaced. The same rule applies regarding timeline: if you have a 60-day deadline, plan on the project taking 90 days. Additional costs result in additional time.

Tip 13 – Buy cheap

A dividend-paying stock and real estate investing are comparable. The return on investment depends on how inexpensive you purchased the item. However, you must consider the return on investment. 

You can spend little money to purchase a modest home in a dangerous area, but you will not make much money from it either. Therefore, focus on acquiring land or an off plan rather than a house. As the year progresses, you buy cheaply, save money, and get more.

Conclusion

Those who are serious about their financial futures would consider real estate an efficient portfolio. One of the best ways to get the financial independence you want is to become a successful real estate investor.

Real estate investing tends to yield more cash flow than the stock market. However, you must exercise caution and listen to real estate investment advice from professionals. With these tips for investing in real estate, you can get started without becoming a statistic of those who have filed for bankruptcy.

Author Name: Liran Koren




Why You Should Buy A Vacation Home Rental as a Real Estate Investment

Why You Should Buy A Vacation Home Rental as a Real Estate Investment

June 9, 2022

Properties in Costa Rica

Real estate is a popular and often safe way to start investing, and when it comes to real estate investments, a vacation home can offer a lot of personal and financial benefits. With current housing rates being at an all-time low in an incredibly active market, it may be the perfect time to consider investing in a vacation home to rent out. From creating another source of income and building equity, to simplifying your getaways and planning for retirement, owning a vacation home rental has great potential for rewards. If you’re considering adding a new property to your real estate portfolio, here are the top reasons why you should consider buying a vacation home rental as your next real estate investment.

Great Income Potential

When you buy a vacation home and rent it out, you can easily create a short-term rental revenue stream. The income from your rental home can supplement your normal salary, allowing you greater income potential. Short-term vacation rentals also typically have a higher return on investment than long-term rentals in metropolitan markets. While the cap rate for a long-term rental is usually around 4-5%, short term rentals often have a cap rate of 10% or higher, making a vacation home a potentially lucrative real estate investment.

Home Appreciation

As with most smart real estate investments, your vacation home is likely to appreciate in value over time, especially if you make smart choices when it comes to renovations and refurbishing that can increase the value of your home. That way if you do decide to eventually sell your home, you have the potential to make a hefty profit.

Personal Getaway

Owning a vacation home allows you to have your own personal getaway home. While you may want to rent your home out most of the year, you can carve out time to visit while it’s empty for an easy and affordable vacation that can even save you money. 

Market Opportunity is Endless

While successful long-term rentals usually exist near major cities, vacation homes can be scattered all along with the globe, even in more secluded areas with vast income potential. Whether you’re looking to invest in a beach home, mountain home, or a cabin in the woods, there are endless opportunities and bound-to-be renters who will likely find your vacation home the perfect getaway. 

Build Equity and Reduces Homeowner Costs

Having multiple revenue streams and building an income property portfolio is an important investment goal for the majority of second homeowners. However, owning a home can come with many expenses such as mortgage payments, utilities, insurance fees, property taxes, HOA fees, and maintenance costs. Owning a rental property has great potential at counterbalancing these homeowner costs from the very beginning, even for first-time buyers. Consistent rental income can cover these monthly homeowner expenses and even help pay off the home in a shorter time than if you had chosen to live in it, allowing you to eventually create a nice profit from the rental. Vacation rental owners may also be eligible for specific tax deductions which can also help increase your potential income. 

Plan for Retirement

Whether retirement is a few years away or a few decades, owning a vacation rental can help you plan for a stress-free future. When choosing a vacation home to rent out, it’s important to think about where you may want to retire — a beach, in the mountains, or in your favorite city. As you move closer to retirement, the amount you may owe on your vacation home will be smaller or may even be completely paid off, allowing you to eventually make it your own home.




Sustainable Properties in Costa Rica

Sustainable Properties in Costa Rica

October 3, 2016

Properties in Costa Rica

Costa Rica is known for its sustainable initiatives and for having a lifestyle which is close to nature.  Throughout the country one will find 27 protected national parks, with wild secondary and primary rainforest, mangrove lined waterways and protected cloud forests.  Solar powered homes, fresh water sources, organic farming and off the grid land parcels, make up a variety of properties which are integrated into the local communities. The country is one of the first in the world with the goal of carbon neutrality and residents share like-mindedness toward conservation of the countries natural beauty.

In July and August of 2016, Costa Rica ran on 100% renewable energy from a combination of hydro-electric power, wind, solar, and geothermal. Homes which are living off the grid are becoming an easier and more economic option with constantly evolving energy storage and institutional support. The movement towards living in an ecologically sustainable way dominates much of the country’s culture and community initiatives are constantly growing to meet the needs of local towns.

The options for construction of sustainable homes is also evolving, with focus on using materials like bamboo, earth and locally resourced hardwoods, optimization of natural airflow, orientation with the sunlight and minimization of toxic materials.  Building in tune with the natural forest and terrain with little impact on the surrounding ecology is not only “eco-friendly“, but it allows an owner to truly experience all the jungle flora and fauna have to offer, proving a living experience which is rarely found in this world.

Throughout the country, there are thriving sustainable communities where people can purchase land and build a home. One of the many examples is Finca Bellavista, which is a sustainable treehouse community. This is a reflection of one type of construction one can utilize here in Costa Rica.  Through the use of natural materials and focusing on the integration with nature, one creates an unforgettable retreat.  Not only that, this Finca covers 600 acres in the Southern part of Costa Rica’s lush rainforests, protecting the natural resources found within.  The best thing about Costa Rica is there are many opportunities for a private property which encompasses these same values.

For investors who see the value in protecting nature, there are properties which can generate a return.  Green hotels, yoga retreats, or eco-adventure destinations, these businesses tend to thrive in a country focused on ecotourism.  In 2015, an estimated 2 million tourists generated over $2.45 billion in revenue and accounted for 12% of the country’s GDP.  Sustainable rural tourism is an example of ecotourism which is growing in popularity due to its environmental initiatives and support of local economies.  Private wildlife refuges which can provide guests with an unforgettable experience and put them up front and center with the wildlife of Costa Rica in their natural environment are a priceless commodity in this world.

The beauty of investment in this country is; if you are looking for something that meets luxury standards while also supporting carbon neutrality, we have it. If you are looking for something a little more rustic, truly immersed in nature, you can find it here as well. Costa Rica in all its diversity supports a wide variety of preferences and lifestyles. The country and its people strive to remain in balance with the natural world and if you share this philosophy, you too will find a place in this important movement.




Sustainability and Costa Rica

Sustainability and Costa Rica

June 28, 2016

Properties in Costa Rica

As one of the most biologically intense countries in the world, Costa Rica has long been known for attracting people craving a more self-sufficient way of life. As one of the first countries in the world to be 100% powered by renewables, it serves as a mecca for those seeking to live in harmony with nature. The natural environment and climate is conducive to a sustainable lifestyle. Year after year people who want to grow their own food, be energy independent and have their own independent water supply move here. This trend shows no sign of slowing down anytime soon either.

From farms to eco-retreats to to permaculture to micro farms, there is a large, enthusiastic, committed community for sustainable living and green design here. The country is known for its eco-tourism, and it’s a major industry for this small country. As a country, Costa Rica was the first in the world to run 100% on renewables. What this trend reflects is a desire among the locals as well as incoming expats to simplify their lives. It’s about downsizing, simplifying in style, and living in harmony with nature. People crave a high quality life at a slower pace and Costa Rica delivers on that desire. The country’s commitment to the environment and protecting biodiversity means it supports the sustainable lifestyle new residents seek.

Costa Rica’s climate makes it conducive to living sustainably and the year round near perfect weather simplifies energy needs because the country does not experience large fluctuations in temperatures throughout the year. In addition, the climate also supports year round agriculture, which makes it easy for locals to grow and produce much of their own food. There is a lot of rich land available, and the relatively young housing stock means that homes tend to be simple yet built with current materials, and can easily be adapted.

Self-sufficiency is part of the culture. People purchasing property and homes here want to take more control of their lives and be able to manage their resources for a number of reasons. For some it’s simply about reducing cost of living, and for others, it’s forged through a deep commitment to living a more sustainable lifestyle, and for others, it’s about a lifestyle choice that allows for more independence. The available housing inventory offers plenty of attractive options for those seeking partial self-sufficiency to those seeking 100% self-sufficiency.

The fact remains there are a number of issues attracting North Americans and Europeans to Costa Rica. Self-sufficiency is a rich part of the culture and history; it’s not an idea people are struggling to grasp and adapt to as is the case for much of North America.These expats seek a simpler more balanced life, and Costa Rica is conducive to a self-sufficient lifestyle. It’s a top international destination when it comes to living a sustainably and finding a home to achieve that goal.




Wondering What is the Best Place to Buy a Vacation Home in Costa Rica?

Wondering What is the Best Place to Buy a Vacation Home in Costa Rica?

March 20, 2015

Properties in Costa Rica

by Andrés Murillo

It’s no secret that Costa Rica is quickly becoming one of the top destinations where expats from United States, Canada and Europe want to buy property, either as a vacation home or as a full-time residence. But although Costa Rica is a relatively small country, its coasts, cities and beach towns are as diverse as can be, leaving many prospective property owners wondering, “Where should I buy?“.

Truthfully, it’s hard to go wrong when buying property in Costa Rica, but through the years people has discovered what we consider the prettiest, most idyllic beach town, located on the Pacific coast of Costa Rica, near the international airport and close to a seemingly endless list of incredible eco-tourism opportunities. Tamarindo, Costa Rica, is being recognized as the best beach town in Costa Rica to buy your vacation rental home.

Let’s clarify that vacation rental home, what we mean is that you can buy a property in Tamarindo, Costa Rica primarily for your own vacation use, but also rent that property to other vacationers when you’re spending time in your home country… You can actually enjoy your property for vacations PLUS it is paying itself and even better: it is generating real income after expenses!

Here are just a few of the main reasons why owning a vacation home in Costa Rica will not only provide you and your family with unparalleled entertainment, but is also an extremely sound investment in terms of resale:

– It’s close to Liberia International Airport. At just 45 minutes from the international airport in the city of Liberia, Tamarindo is easily accessible. Finding a shuttle, a rental car or a taxi to take you from the newly renovated airport to your doorstep is not only a breeze, it’s very affordable.

The tourism is unmatched. World-famous waves, beautiful estuaries, dormant volcanoes, miles of clean beach, great shopping, excellent food and outdoor activities are right at your doorstep. Tamarindo is one of the fastest-growing towns in Costa Rica, touristically speaking, meaning you’ll never be in short supply of incredible experiences to take advantage of.

A return on investment that’s virtually guaranteed. Anyone from this town will assure you that land values in Tamarindo have increased steadily over the years. It’s almost unheard-of that a property might sell for less than its purchase price. Tamarindo is a highly desirable place to live and vacation, and for you that means resale prospects.

Beach
Tamarindo has one of, and maybe the, strongest vacations rental market in all the Pacific Coast

Strong vacations rental market. Tamarindo has one of, and maybe the, strongest vacations rental market in all the Pacific Coast… That said, you could expect an excellent return on your investment while you can also enjoy the property with your family and friends. Depending in the property and its location, properties can be returning between a 4% to a 10% after ALL expenses (property taxes, HOA fees, utility bills and maintenance expenses).

Key to all is: 1. Having a proper marketing program for your property and 2. Hire the right property management company – Ask for advise and we will provide it.

There are incredible deals to be found on vacation properties. Despite a spike in popularity over the last dozen or so years, land values in Tamarindo are fairly low, making it a very viable option for homebuyers looking to purchase a second, or vacation, home in Tamarindo.

The variety is endless. Tamarindo housing types are as varied as any town or city. Tamarindo is home to multi-million dollar estates with panoramic ocean views, luxury ocean view condos, and quiet homes located off the beaten path. You’ll likely find that whichever type of vacation home suits your tastes, the prices will compete with anything you might find back home.

Great people and excellent infrastructure. Costa Rica is anything but a third-world country. Instead, it is very well developed, with excellent roads, great cellphone reception, and reliable electricity and water service – especially in Tamarindo.
Further, the people who live in Tamarindo, both the locals and the expats who have already made their full-time or part-time homes here, are extremely friendly and welcoming to newcomers. In Tamarindo you can find a real multicultural mix with residents from ALL over the world living in this small beach town.

Once you see the supreme natural beauty that Tamarindo has to offer, we’re certain you’ll be as convinced as we are that it’s by far the best place to buy a vacation property in Costa Rica.

Contact Properties in Costa Rica today so we can begin finding you your dream vacation home in Tamarindo, or wherever you’re dreaming of.

 

 

 



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