Buying an investment property in Ridgewood, New Jersey – or anywhere in the United States – can be a great investment for your financial future. However, just because investing in real estate has a great reputation for offering stellar returns and building wealth, it doesn’t mean that all investments are created equal. The secret to getting great returns on your investment property lies in understanding the fundamentals of what makes a great investment and a focus on finding only the best properties to buy. Our team at Tarvin Realtors has been assisting buyers, sellers and investors of Ridgewood real estate for more than four decades and has the knowledge, experience and resources to help you find the investment property you desire.
Below, we’ve put together a list of ten things to consider before investing in your first Ridgewood property. The list will help you sort through the clutter and to find the property that best meets your short and long-term goals. Let’s take a look at each of the ten items to better understand what to expect when investing in Ridgewood real estate.
1. Are You Ready to Invest? Investing in real estate is not for everyone. While you don’t need to be a millionaire to take advantage of great investment deals, it is important that you have a firm grasp on your finances before investing. This is not a “get rich quick” scheme, but an investment that will need to be cared for and managed potentially for decades.
2. Do You Have a Plan? Lack of planning is one of the biggest causes of investment failure – whether in real estate, stocks or mutual funds. Always consider your short and long-term goals and what your plan is for the real estate you purchase. Will this home be a rental home? Will this be a fix and flip home? What are you trying to accomplish?
3. What Kind of Property Should You Start With? There are all sorts of niches and strategies to real estate investing. Whether you’re looking to flip a home, to manage a collection or rental properties or want to “become the bank” and lend money to other investors, there are a wealth of strategies in real estate investing. Our Realtors® at Tarvin Real Estate can help you understand the pros and cons to each of these strategies.
4. Location, Location, Location: This is perhaps one of the most vital components to choosing a real estate investment location. Thankfully, if you’re interested in the Ridgewood real estate market, you can rest assured knowing that families and professionals are continually drawn to this vibrant town. Always drive to the property at different times of day, on different days, to ensure you’re comfortable with the location and that it fits your overall plan.
5. What are the Local Vacancy Rates? This is particularly important if your plan includes rental properties. If vacancy rates are high, perhaps now is not the time to jump into the rental business. If vacancy rates are exceptionally low, maybe the market could use some more quality rental homes. Again, our team at Tarvin Real Estate can help you with this very important statistic.
6. Calculate all Your Investment Expenses: Some overlooked expenses include water/sewer, garbage, legal fees, accounting, evictions, vacancies, office supplies, fuel, scheduled maintenance, capital improvements and utilities. Be sure to have a handle on the costs of your investment before you get started.
7. How Will You Finance? Whether you plan on paying cash or taking out a loan, always be aware of any terms and interest rates that will effect your payment structure. Our team at Tarvin Real Estate can point you in the direction of several lenders in our area that are happy to loan on investment properties.
8. Should You Hire a Professional Management Company? This is a big question that sometimes gets overlooked. A professional property management company may cost a few percentage points out of your monthly income, but a team of professional property managers can also have a great impact on your overall workload. They are hired to take care of your property and to ensure it is being rented for its highest dollar. Hiring a professional can be a great way to improve your overall experience in property management.
9. Bookkeeper? Not everyone is great at accounting and management. Of all the benefits that real estate investing has going for it, easy paperwork is not one of them. If you’re not confident enough to run the books yourself, seek the help of a professional to keep track of the numbers.
10. Do You Have an Exit Strategy? This goes back to having a plan. Always ensure you know what you want to do with your property and have a plan on how to execute that plan.
These are just a few of the tips that our team at Tarvin Real Estate recommend considering before jumping into real estate investing. Should you have any questions or would like to schedule a consultation regarding your specific needs, we are always just a phone call or website inquiry away. Connect with us today to get started and to learn more about the investment properties that Ridgewood currently has available. We look forward to hearing from you soon and to helping you with your property search. Connect today!