Real estate investing has almost gone by the wayside in this unique pandemic era. Real estate has exploded in the last year and investors may find themselves scrambling to buy. On the other end of the scale, a lot are choosing to offload their rental properties based on increased home values and what they could potentially get out of them. However, if you thought about investing in real estate and just haven't pulled the trigger, your dreams don't have to be dashed in 2021. There are still ways to invest in real estate but the details are getting more tedious in the process getting a little bit harder. From real estate experts across the country, here are eight things you should know before investing in real estate in 2021.
"Cash flow is an important factor when it comes to selecting the right real estate to invest in. There's clear benefits to owning real estate that can influence the properties that you choose. You'll need to weigh the amount of profit that you learn after fixing up the property and flipping it or renting it out and earning monthly cash flow investments. You also need to weigh the annual income against the properties inherent decreasing value to determine how much you owe in taxes. Remember that there are a lot of costs involved in simply owning property, more than just the mortgage payment. Property taxes, insurance, property management fees potentially, and maintenance all need to be factored into whether or not this property is going to make money." - Todd Blair, Admiral's Cove Jupiter FL
"It's also important to understand the type of mortgages available to investors. Most investors must have at least 20% down payment to qualify for an investor mortgage if you're not planning on living in the home for two years or more. However, this could be a workaround. If you choose to buy the home, live in it for two years, and then turn around and rented, not only can you get a better mortgage rate and deal, but you might wait out the unique real estate market that we're dealing with right now and actually come out better in two years." - Property in Santa Cruz
"Are you going to be the landlord? This is a big question that you'll need to consider with real estate investing if you're planning on renting the property out. As a landlord, you may need to be available 24 hours a day to assess certain problems as they arise. However, if it works into your profit, you may consider hiring a property manager to handle day-to-day business operations, especially if you live out of the area. You'll need to include this in your profit and loss statements to evaluate if it makes sense." Park City Realtors Noble LaCouture
"Similar to stocks and bonds, real estate investing is a marathon. It typically won't turn a profit initially but over the years as the mortgage gets paid off, you'll have a positive cash flow that can generate monthly income. You may even want to buy more property for rental income as you go but it does need to be a long-term viewpoint on the investment." Sherman Oaks Realtor®, Sara Mehrpouyan
"Consider how much you're likely to make each month. Income from investment properties can be anywhere from 6% to 8% per year. But it's also a way of diversifying your income from stocks and bonds. If equity markets go into a correction or downturn, your rental income could be unaffected. However, landlords can be affected by changes in the housing market or overall economy. Since were not in a recession, buying now may or may not be the best option since home values are high, but, interest rates are low so it all depends on the type of home, where you buy and if it makes sense financially." Alex King, Fort Myers Realtor®
"If you're planning on jumping into the real estate market having a real estate attorney on speed dial might be ideal. They can help you sort out some of the legal jargon that you may have to deal with and answer questions or write up contracts that protect you. It definitely pays to have a real estate attorney in your back pocket." - Summit NJ Homes for Sale, Miggins Real Estate
"If you're interested in real estate and you just started thinking about it this week, don't expect to find the perfect property next week. This is the long game and you should plan out at least a year at a time. Get some books, watch videos on YouTube about investing, and don't be scammed by people that can say they do it all for you. If you're in it for the long haul, it will pay off." John Kinnunen, Clearwater Beach Condo Expert
"Buying a commercial property is another great way to earn investment income. You don't always have to buy a single-family home or multifamily property to gain investment income. Strip malls, office buildings, and complexes can offer a great rate of return but it's important to have a real estate agent that understands commercial leases, rentals, and ownership situations." Tampa Bay Tenant Rep
The biggest takeaway is to do your research and be patient. The perfect property may not drop in your lap immediately but with some perseverance, research, and the right team backing you, you can set yourself up for investment success.