In a Gallup poll completed in 2014, participants reported that real estate was the best investment option available. Although some in Illinois may be deterred from investing in real estate with the help of their Arlington Heights property attorney after the recent housing crash, purchasing property for investment properties can still be beneficial.
Determining if real estate is the right choice
Those who are seriously considering investing real estate should consider a few different things before they get started. For example, potential investors should think about whether they:
- Have a substantial amount of investment capital, or at least enough money to obtain property without going into significant debt
- Possess in-depth knowledge about the current real estate market and are familiar with the neighborhood they are interested in investing in
- Are able to negotiate, manage and work well with other people
Those interested in investing in real estate should also keep in mind that transactional costs, like repairs, sales costs, renovations and holding period costs, can take up 20 to 40 percent of their invested equity. Additionally, real estate investment properties should only be acquired by buyers who intend to hold onto them long-term. Typically, this form of investment usually do not begin to provide a noticeable profit for at least seven years after purchase.
Getting started
Once the decision to invest in property is made with the assistance of an Arlington Heights property attorney is made, buyers should take several steps to ensure that their investment is beneficial. First, investors should determine what their goals are. While some investors may desire to purchase properties and renovate them to increase their value, others may want to purchase homes for renters to live in as a way to acquire a steady stream of income.
Second, those investing in property should thoroughly familiarize themselves with their target neighborhood. This should include researching local zoning laws, learning more about the rental market and finding out what future projects have been planned for the area. Third, those interested in buying property should purchase real estate at a good price and keep their financial constraints in mind during the buying process. According to U.S. News, investors should try to buy property for about 12 times what they can receive annually in rent.
By taking certain steps during the purchasing process, buyers may be able to secure the profitability of their real estate investment. Those who want to ensure that the purchasing process is successful as they begin to invest in property may benefit from consulting with an Arlington Heights property attorney.
