For many people looking into real estate investing, the thought of short term corporate housing as a rental option never even crosses their mind. The thing is, this can be a great way to get into a lucrative niche of the real estate market, especially if you have a highly qualified management company taking care of all the day to day operations. Real estate can still be a great long term investment if you manage it properly, and like many things, if you think “outside the box” just a little bit, you can often do quite well.
Today we’re going to look at a couple different options for you for if you’re just starting out in real estate investing. These are probably the easiest to implement for beginners, and they’re very much recommended if you’re just starting out. So let’s get into it.
So, in starting out in real estate investing, beginners would be wise to look into a couple different options that will be covered in this video. And one of the best ways to go is to buy properties that you can rent to tenants. This perhaps has the lowest learning curve and relatively low risk as well, as long as you can rent a property for a positive cash flow. And the other method of investing which will also be discussed is called wholesaling, which we’re going to talk about at the very end.
So first let’s talk about buying rentals. For those wanting to purchase rentals, when you’re looking for properties to purchase, it’s good to look into an area where property prices are low. In some areas of the U.S are lower in price than others. In fact, you might want to look for properties in places like Kansas City or Memphis. These cities overall have lower house pricing compared to other parts of the country. And you may not want to deal with things like handling tenants or fixing toilets. And if this fits your description, then finding a property manager may be for you.
You can find many of these types of companies that charge just a small fee for managing your property and your tenants. Some of these companies will even charge a flat fee and other companies will charge a percentage of the rent that you’re charging, which actually is a good way to go because you won’t have a whole lot of up front out-of-pocket costs.
Another benefit is also going with the services of a property management company… another benefit is that they contract with plumbers, electricians, air conditioner repairers, and roofers for much cheaper rates than what you can find if you were to find these types of contractors on your own.
So now let’s get into the topic of wholesaling. Wholesaling is basically playing broker. You find the good properties, and arrange to get it under contract and into the hands of a buyer. This can be an extremely lucrative way to invest for beginners, because there’s very little risk, and you also don’t have to purchase the property yourself. And typically payment is very fast for you. In fact, you can earn about $10,000 per deal that you put together. And the fee that’s paid to you is called an assignment fee, which is tacked on to the price of the property.
So let’s wrap up. So if you’re just starting out, I would recommend you look into these two options first. They are relatively simple, and they have great returns as well. So next time we’re going to zero in closer on what it takes to buy rentals and run this type of an operation, including how to set up a business plan.
And again, something that not a lot of people consider is the possibility of using a property for short term rentals, such as corporate housing and temporary housing situations. While you may not have your property occupied 100% of the time, the income you generate during the times you do have tenants can more than make up for the times it’s vacant. This can also allow for out of town owners to be able to come and take advantage of their property as a vacation get-away at times. It’s truly a great option and one we highly recommend people interested in real estate investments take the time to learn about a bit more.
For those who have specific questions about how you might incorporate and make the most of Corporate Furnished Apartments in Tucson, feel free to give us a call any time.