Making the Most of Your Money by Investing in Real Estate

You know the saying “strike while the iron is hot” has never made much sense to me. I mean that seems like a great way to get burned. The real estate market is a prime example of this. You want to buy when the market is at its coldest, and that is now. It is definitely a buyer’s market. Yet while housing prices drop rental rates rise. This makes for a perfect time to jump into the Real Estate Investment world.
The average interest rate you could get from a CD is just over 2%. Now this is a five-year CD so once you put your money, let’s say 100,000 into a 3 year CD with an APY of 2.5% your return would be just under $8,000. However is you were to take that same money and buy a home you could get a rate of return much Private Investment Groups higher. For instance I know a couple that purchased a home for $170,000 and the home brought in $1000 after taxes and expenses (which is a conservative estimate) the rate of return is around 7%. Plus that $12000 a year is pure cash flow as opposed to a CD where your money is tied up for the length of the CD.
Now very few of us have enough money lying around to buy a home, but if the right home can be obtained for the right price, it is possible to get enough income to pay the mortgage and maybe even have some left over. So while building equity, you are also getting an infusion of cash.
The right property management company can even increase the amount of return you get, by maximizing the operating income of your investment. A professional management company with an aggressive marketing strategy can limit the amount of time your property is vacant. Single family homes, even Duplexes and Triplexes are known for having a higher retention rate, as opposed to apartment complexes, so once you get a tenant as long as they stay happy they are more likely to renew their lease, year after. A management company can also save money by using their contacts to save money on maintenance.
Now with all investments there are some risks, just ask those that bought when the market was at its height. You never want Steps To Buying A House In New York State to invest money you can’t afford to lose, and always consult a Real Estate or Financial Expert before you take the leap.

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