Your answer last week was about investing in real estate, which you highly supported. My question is, how do you determine what real estate to invest in for financial gain?
Dear “Soon to Be Successful Investor,”
You have asked the most important question — something, I am sure, Donald Trump works on all of the time — how do you pick the right properties to purchase? First, you need to choose your investment goals, as there are two main types of investments properties. One type will bring you increased value over time and you will reap your profits when you sell. The other will give you monthly income (and hopefully will appreciate as well). If your goal is to gain appreciation over time, then you may be looking at luxury property in this valley. I know a real estate coach that teaches agents to buy a luxury home in a prime location to live in because, according to him, that type of home will always retain its value and has a great chance to appreciate over the years. If you are looking mainly for monthly income, then you are probably looking at commercial and/or lower priced condos, townhomes and single family homes, something that will rent for enough to pay your expenses and more.
In order to find long-term appreciation or short-term cash flow, I would suggest taking the following three steps:
• Research and find several knowledgeable advisers — a banker or lender that you develop a personal relationship with so that they will give you the leverage you need to make a relatively quick purchase if a great opportunity arises; a good personal CPA/tax adviser to discuss the tax consequences of any purchase; and the most important consultant, in my somewhat biased opinion, a real estate agent with a proven track record in today’s market. The knowledgeable real estate agents have their finger on the pulse of the market every day and can give you great information on past sales and current opportunities.
• Educate yourself as to what the market is doing so that you can make informed decisions when presented with good options. You can accomplish this by asking your real estate agent to supply you with a constant flow of information on trends, new developments, opportunities that appear on the “Hot Sheet” daily and reports on areas and price ranges that meet your criteria. A knowledgeable real estate agent should be anxious to meet with you as often as you like to help you thoroughly understand the niche you are interested in for investment.
• Develop a positive attitude. This may be your most important step! I am a firm believer that how you feel and what you think becomes your own reality. Surround yourself with positive advisers that have plenty of enthusiasm and excitement for life and the market. Soon you will find just the right direction to go and the opportunities will appear.
Joan Harned is an owner and broker for Keller Williams Mountain Properties and heads up Team Black Bear, her own real estate team. Harned has been selling real estate in Eagle County for 27 years, is a past chairman of the Vail Board of Realtors, past Realtor of the Year, past director on the Great Outdoors Colorado Board and a member of the Luxury and Land Institutes. Contact Harned with your real estate questions at Joan@TeamBlackBear.com, 970-337-7777 or www.SkiAndTeeHomes.com.