Harleysville-Lansdale Real Estate and More

Many people are intrigued by the idea of investing in real estate, but most people don’t know where to start.  While there are many factors to consider, the old mantra of investing “Buy low, sell high” is still completely accurate.  And let me tell you, right now is a chance to BUY LOW.

Our team has helped several clients put together plans to evaluate and purchase investment properties.  To start, it is critical to understand the different motivations for owning an investment property and which ones will be critical for you. 

These motivations do vary from investor to investor.  Of course all investors want to make money, but some are primarily concerned with monthly cash flow while other are more concerned about price appreciation. 

To some investors, ease of maintenance and a lower level of involvement are desirable while still others like to be actively involved in managing and maintaining their properties and reaping the financial benefits of doing so.

Price appreciation will vary depending on many things, but location is a major driver.  A stable area will produce good to average results for price appreciation; whereas, a highly desirable area or better yet an “up and coming” area will produce better than average long term appreciation of the property.  The upfront costs and cash flow generated could be less attractive, however, for a more desirable area.

For any investor looking for short term (or purely speculative) price appreciation, those days are gone for the time being. 

FLIPPING

Experienced or professional investors can still do well “flipping” a property that needs significant renovation if they have the capability to get that type of work done quickly and inexpensively. 

This type of “flipping” is where an investor buys a property at a deep discount because the home needs significant repairs/renovations, makes those repairs, and then turns around to sell the property quickly (and hopefully at a profit).

There are potential issues with buying a property to flip using common mortgage financing.  For example, mortgage companies typically will not lend on a home that needs significant repairs or may require that some repairs be completed prior to settlement.  For this reason and due to the upfront mortgage fees, many professional investors use private lending sources to finance their purchases.  These are usually short term loans with interest rates much higher than general market rates for mortgages.

We have helped investors buy and sell “flip” properties.  Those require a good understanding of the area, homes prices in the area, the nature and cost of repairs, and an ability to get the work do quickly and inexpensively.  This type is investing is risky for the inexperienced investor as the management of the rehab and control of costs can get overwhelming.

RENTAL PROPERTIES

Investing in rental properties, however, requires an entirely different evaluation where such things as rental prices, acquisition costs, needed repairs, operating expenses, cash flow, and return on investment (ROI) are taken into account.  This type of investing is a good way for someone who is new to real estate investing to “get their feet wet.”

As an example, the attached spreadsheet shows an analysis of investment properties that we have sold within the last 18 months.  As you can see, in all cases, the clients needed to put a minimum of 25% down.  (The old adage that you need money to make money is also true.)  ROI’s range from 0.59% to 14.3% and there was obviously a range of motivations for our buyers as well.

For a list of Our Picks of Investment Opportunities currently on the market in the Lansdale area, go to our website. 

http://www.scottloperteam.com/remaxparealtygroup/modules/agent/agent.asp?p=text&id=6806

Ready, Set, Invest!  Real Estate Investment Opportunities in Lansdale PA originally appeared in the Montgomeryville-Lansdale Patch.

Contact Scott Loper, Associate Broker, Realtor®, RE/MAX Realty Group at 215-513-1333 for help buying or selling a home in Lansdale, Harleysville, Hatfield, Souderton, Skippack, Collegeville, North Wales and the surrounding areas of Montgomery County of Pennsylvania. To Search for Homes For Sale in Montgomery County Click Here.

Ready, Set, Invest!  Real Estate Investment Opportunities in Lansdale PA - Copyright © 2011, The Scott Loper Team, All rights reserved.