Real estate investors advise their clients that the best time to invest in real estate is always now. The world of real estate is constantly changing, so there is no single right time to make your investments in real estate, as long as you realize that investing in real estate requires patience, research, and cash.
There are lots of reasons to invest in real estate, and you can start building your portfolio at any age. Lots of money is not necessary. Real estate is often favorably regarded as collateral for loans, and the value of real estate trends upward. It’s a more stable investment than mutual funds or individual stocks. It’s a more lucrative investment than your money market or savings account.
Even so, according to the US Census Bureau, 75% of multifamily real estate (apartment) investors are over the age of 45. Most real estate investors like Patrick Carroll wait to invest in real estate because of unwarranted fears.
One fear, Carroll says, is that housing prices will go down. The thing to understand about housing is that prices constantly go up and down. The red-hot market of 2023 is giving way to the so-so market of 2024, and houses are taking longer to sell, but Fannie Mae is still forecasting that more houses will be sold in 2024 than in 2023. And the American Institute for Economic Research predicts mortgage rates will continue to fall.
The best strategy is to look for good value, and not to worry about short-term trends. Look for fundamentals for sustained growth.
Location matters. Look for properties convenient to jobs and schools, malls and entertainment options.
Look at crime rates, and property tax history.
Invest in the kinds of homes that the neighborhood wants, whether single-family, condo, or apartment. Consider what city leaders are promoting for their neighborhoods and ride the wave.
Investigate recent sales and look for good bargains.
Don’t buy a property because you “love” it. Investigate first. Take the time and effort to know your choices.
Be careful with a buy and flip strategy. Lenders tend to charge much higher rates of interest because of the risk involved.
And protect your investment with continuity of income insurance to be sure that cash will be coming in even when tenants don’t meet their obligations. With these precautions, you can build a foundation for a lifetime of financial security.
