Real Estate is generally a great investment as it can generate ongoing passive income. Not all
is created equal in real estate though when it comes to an investor. A new development being
built down the street may look appealing, but it is completely useless in the eyes of an investor if
it wont allow rentals. Which means no rental caps. For any real estate investor, a typically
really good turn on investment is about 15% annually. It is about finding the options available to
generate these returns is what keeps an investor interested.
With ever changing laws, though it is not necessary to work with a real estate broker as an
investor, there are many beneficial ways to use them to increase your bottom line. Especially if
you are investing in a city outside of where you live, an agent can keep your numbers aligned
with the comps and knows the market to help you sell your properties fast and at top dollar.
Having someone who is knowledgeable about the market and do the work for you while you
focus on your strengths as an investor is a sure fire way to increase your bottom line. The
broker will also have the lingo down and know the numbers at a close, whether its for a rehab,
wholesale, or a rental deal. The last thing an investor wants to explain to an agent are the
details of a “cap rate” or an “ARV”. An agent skilled in investment properties will avoid any
investor from getting a headache while trying to negotiate and have the other side know their
Beyond an investment property that harbors long term tenants, many investors are looking to
other companies, such as Airbnb to generate a more short-term rental strategy. This strategy
can be more lucrative than traditional renting and offer a diversified portfolio of tenants, but
expenses may be higher, income may be irregular, and there may be some restrictions.
Depending on your location, some cities only allow 20% of a building to rent out the spaces
specifically for Airbnb. If you are not in the city, there are some local restrictions on what you
can and cannot do with Airbnb for your home and some paper work that has to be completed
with the local government.
When it comes to an investor finding the perfect property for potential rentals, it all comes down
to education. If you are interested to invest in a particular city, get to know other investors who
are already doing it there. Listen to them and get solid advice from people who are already
doing what you are looking to accomplish. Know the market and the areas so you know the
neighborhoods and their demographics. The last thing you want to do is invest in a new
beautiful property that lies within a neighborhood where the other owners / tenants don’t take
pride in where they live. Which can cause you a lot of headaches and repairs down the line.
Many cities are seeing an increase in rentals due to large companies seeing the demand of
people wanting to work within a city where they live so they are moving their headquarters to
downtown locations. People no longer want to work in an isolated area, they want a workplace
within a thriving community. Do some due diligence on the buildings / neighborhoods and work
with a realtor to help you understand the local laws and changing demographics, so you can
find an investor friendly location that won’t stay empty or need a lot of repairs. And also help
you understand the comps, so you can buy an investment property at the best deal, and beat
any other investors looking to get in on the rental uprise.