Real estate is a big investment. It takes time and effort to plan for the purchase of a home and it will probably be your largest monthly expense. Now that we are past the housing recession, properties are in a position to appreciate, giving you more value for your residence in the long run. Furthermore, Breckenridge real estate is making significant gains. I’m proud to see the monthly progress in this market.
With this market in such good shape, you might wonder whether or not to enhance your real estate portfolio by purchasing an investment property. I can tell you in all confidence that this is a great time to consider the option. Whether you want to join a real estate company which invests in homes or would prefer to be on your own, investing in properties can be very lucrative over the long term.
Today I’d like to explain how Breckenridge real estate companies tend to invest in homes.
The practice of becoming a landlord is well established, going back hundreds of years. Basically, the landlord, who is also the owner, rents out the property to a tenant. The landlord must then pay the mortgage, taxes and any maintenance costs.
It is ideal for the landlord to charge enough rent to cover all of these expenses. While it’s possible to charge a little more for a profit, usually, the best approach is to be patient and pay off the mortgage with the rent. Once the property is paid off, the rent turns into real income. Generally over time property will also appreciate in value which ensures a higher selling price if and when the landlord decides to sell.
Although there are many positive aspects to renting a home to a tenant, you could also face risks. Without realizing it, you might have a bad tenant who damages your property. Or you could discover that you’re unable to lease the residence at all, leaving you to pay a mortgage on an empty home.
In addition, there is time involved in maintaining this rental property. Unlike a stock or similar type of investment, a property designed to be rented needs regular, hands-on attention. The furnace could stop working in the middle of the night or a pipe could leak unexpectedly, requiring your immediate attention. As a landlord, you must be prepared to see your rental property as a top priority and be ready to make repairs, even when it’s not convenient.
If you want to own an investment property, but you’d rather not have to deal with the potential for daily hassles, there is an alternative. You could join a real estate investment group. The premise is that a company will buy or build apartments or condos and invite investors to buy these properties. In this type of set-up, an investor can purchase multiple units and leave the management of these homes to the group. This means you can be an investor without the headaches that often come with being a landlord.
In exchange for the company taking care of maintenance, advertising and tenants interviews, you will pay the group a percentage of the monthly rent. It’s like having your own property manager to do all of the heavy lifting on your rentals.
One of the nice things about joining a group of this sort is that you don’t have to worry so much about vacancies. The group pools a certain percentage of monthly income together to cover any empty units so you aren’t scrambling for a way to pay your mortgage.
Keep in mind, though, that there are important details to consider. For one, real estate investment groups can be known to charge high fees. That’s why I recommend that you do your research before becoming part of one of these companies. Any time money exchanges hands, it’s always best to make sure you feel comfortable with the agreement.
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As you can tell, investing in the Breckenridge real estate market can require plenty of work, but it can lead to great return in the long run. If you enter this area of real estate, though, you need to be aware of what’s involved. I hope this blog has helped give you a better idea of the things you can expect once you become a landlord.
If you’re ready to purchase a new home in Breckenridge or throughout Summit County, get in touch. I can put together some properties that might suit your tastes, and you can always start your research by looking through the updated listings on my website. When you’re ready to explore your options or prepare for showings, contact me at any time via email ([email protected]) or on my office line. I look forward to working with you!