Real Estate Investing
LAS VEGAS NV | SPRING VALLEY NV | PARADISE NV
Real estate investing is becoming more and more popular. It can be a great way to diversify your investments and generate cash flow. However, as with any investment, it’s important to understand what you are getting into. If you are interested in learning more about investments in real estate, contact Galindo Group of Las Vegas today!
Why Invest in Residential Real Estate?
There are many reasons people are choosing to invest in real estate. Real estate increases your cash flow, the returns are more predictable than bonds and stocks, builds your portfolio, and builds equity.
Residential Property Investment
Residential property investment is the most common in real estate investing. There are several types of residential real estate you could invest in.
- Single family homes
- Multi-family homes
- Duplex structures
- Fourplex structures
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Flipping Houses for Profit
Many investors make big money flipping houses. This is when they purchase an investment property, renovate it, then quickly re-sell it within a year. The biggest advantages of flipping houses are that they have the potential to make a good profit and they can be safer that stocks because of a more predictable market.
Buy and Hold to Build Equity
What many successful investors do when they acquire residential properties is buy and hold. Unlike flipping a home, investors will essentially do the opposite. They rent it out for a period of time to help pay the mortgage until the value increases. If you’re choosing to buy and hold, you’ll need to be prepared to handle the responsibilities it takes as a landlord or you can have a property management company maintain the responsibilities for you.
The Benefits of Rental Properties
While there are other types of property you can invest in, investing in rental properties has many benefits.
- Rentals are easy to sell
- Rentals are easy to rent
- Rentals are easy to finance
- Rentals maintain their value whether rented or not
Something to keep in mind with rentals is that most lenders will require investors to put at least 20 percent down because mortgage insurance isn’t available on rental properties. You’ll also want to consider if the property needs repairs before it can be rented out.
Consider the Return on Investment
Before purchasing an investment property, you’ll want to know what the expected return on investment is; also known as simply ROI. Rental properties will help generate cashflow but the return on investment typically doesn’t occur right away. Below is the ROI formula.
ROI = (Current Value of investment – Cost of investment)/Cost of Investment
The capitalization rate, cap rate, is another real tool that helps investors determine their potential ROI. The capitalization rate is the net income divided by the asset cost.
Build Your Investment Portfolio
If you’re interested in real estate investing, you may want to first talk with an experienced real estate agent in the area you are interested in. Finding an investment property isn’t as simple as scouring through listings. Real estate agents know the area. They can tell you price histories on similar homes to one you may be interested in and how recent sales have been. Real estate agents will also keep you informed about current market prices and can refer you to a local lender.
At Galindo Group, our realtors are highly knowledgeable about the Las Vegas market and they are ready and willing to help you find the perfect investment property. If you’re ready to invest, contact Galindo Group. We look forward to working with you!