Tag: investments

Diversifying Your Real Estate Portfolio To Reduce Risks

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When it comes to investing your money, many investors choose to invest in real estate due to the low risks and high rewards. However, although real estate investing is relatively low-risk, risks are still involved, just like with any other investment. One way to reduce risks is by diversifying your portfolio and spreading your money across different investments.

Interested in developing a new strategy to diversify your portfolio and optimize your investments? Let’s dive in!

Property Types

One of the main ways you can diversify your portfolio is by investing in different property types. Each type has its own risks and rewards, so by investing in multiple types, you can balance your portfolio and put money into different income streams.

Different property types that are more popular to invest in include:

  • Residential/Single-Family Homes
  • Multi-Family Homes
  • Apartment Buildings
  • Commercial
  • Industrial
  • Land
  • Special Use

Geographical Locations

Different geographical locations can deliver different results based on market conditions and unexpected situations, so expanding into different locations can only benefit you and help protect your investments. Some markets could be booming while others are taking a turn, so it’s best to spread out your investments across multiple locations.

Consider expanding into different geographical locations, including:

  • Cities
  • Regions (west coast vs. east coast)
  • Living types (city vs. rural)
  • Low-income vs high-income communities

Real Estate Markets & Trends

The real estate market fluctuates constantly due to changes in mortgage rates, home prices, days on the market, and more. Investing in different real estate markets and market trends requires you to shift your perspective, which can help you diversify your portfolio (sometimes unexpectedly).

Looking at what the real estate market is doing can help you determine which real estate avenue to invest your money into based on what you think others might be looking for. For example, when the market is good, people might want to rent a single-family home or a high-end apartment. However, when the market is bad, people might need to downsize from their homes or rent a more moderately-priced apartment.

Diversification is not a requirement when it comes to real estate investing, but it could be worthwhile and help you build wealth while expanding your portfolio. If you have questions about diversifying your portfolio, reach out to us! We would love to be a resource for you! 

Single-Family Residences, Built For Rent Homes, Meet Austin’s Home Seeker Needs

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Trends that began last year have recently resurfaced. Buyers’ and renters’ priorities are shifting as the economy continues its journey through the tumultuous year, uncovering unique opportunities. Austin’s single-family-built-for-rent market will most likely expand as we move further into 2020. What are SFBFRs? They are the comeback trend from 2019 that could help housing affordability and challenges to homeownership due to COVID-19 effects. With demand for single-family homes outpacing supply and even as individuals and families prefer the stand-alone home, not everyone can or wants to buy right now.

With unemployment rates increasing, down payment challenges are also on the rise. Meanwhile, low inventory continues to push home prices upward, and many home seekers are widening their search to include rentals. Renting affords the opportunity to live in specific geographic areas or communities with little commitment and less out-of-pocket cash. However, especially while health concerns have many people avoiding high-density housing, moving into an apartment does not tend to fit the needs of a large portion of the rental market. Professional millennials, those in transition (divorce, downsizing, upsizing), or empty nesters all have something in common: they want the convenience of renting with the privacy and quality of life of a single-family home. 

In the first quarter of 2020, SFBFR activity increased from the previous year across the nation. Its share of build-to-rent homes is taking a larger chunk of the new-home market and many in Austin are seeking such an opportunity, in the form of both renters and builders. Projects such as Urbana, part of Goodnight Ranch in Southeast Austin, are building new homes with high-end finishes and private yards specifically to go directly on the rental market. These upgraded units for lease are a step above apartments, don’t require a long-term mortgage commitment, but still provide the amenities people want and need, such as washers and dryers, spacious floor plans, and someone else to manage the repairs. It’s a win-win. 

Successfully investing in Austin real estate requires paying attention to the market and the demands of home seekers. As we head deeper into 2020 and monetary priorities shift for Austin buyers and renters, it’s critical for those looking to purchase rental property to adjust to them. If you need guidance on the current real estate trends or have questions about managing properties, contact Dona Brown. Her years of experience can save you time and money when investing in Austin. 512-721-1094. 

Successful Real Estate Investing 101

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If you’re considering investing in Austin real estate, it’s essential to make informed investment decisions throughout the process. In this blog, we’ll walk through five fundamental principles to consider when investing in Austin-area real estate.

  1. Focus on current returns, not future appreciation. A successful investment must make money from day one. Increases in home value are simply a bonus.
  1. Know the area and neighborhood. Do your research. Get details on the specific community you’re considering. What’s the long-term outlook? What developments (commercial and residential) are coming to the area? What’s the potential for population and job growth? These are all critical questions to answer.
  1. Learn the local and federal laws. Regulations–both local and national govern investments. Understand your responsibilities as a property owner. Missing deadlines, not understanding requirements, or violations of ordinances can be a costly mistake.
  1. Build relationships with local maintenance professionals. Repairs are inevitable with rentals. Take the time to research and build relationships with trustworthy repair and maintenance professionals. If you ever need a recommendation, reach out to me anytime–I’m always happy to provide the names and contact information of those professionals I trust.
  1. Earmark funds for capital investments. Small repairs are often easily managed; however, more extensive systems, such as HVAC, plumbing, or roof, require a dedicated budget. Be sure that you have the funds set aside for capital expenditures.

Successful real estate investing begins with doing your research and making informed, calculated decisions. If you have any questions about investing in Austin real estate, property management, or rental properties in Austin, reach out to me anytime. I’m always happy to help.