There are two broad categories of real estate investment: owning a rental property or doing a fix n’ flip.
Did you realize that when renting out a house instead of selling, it makes a good retirement investment? It’s an inflation-adjusted retirement asset that usually has triple payback:
1) Positive cash flow each month (rents are often higher than the monthly cost of owning a rental, especially in Denver right now)
2) Paying off the property — over time, your renters are paying off your mortgage and building equity for you.
3) Property values tend to go up over the long haul, especially in a desirable market like Denver. Unlike investing in stocks, in the event of a “crash” you have a real asset, not a stock certificate.
Buying and renovating a house for resale involves having enough capital to buy the house and also to do the work needed on a house. If you are using Paul, you are unlikely to end up with a “money pit.” There are plenty of houses that need a lot of work. The shows on HGTV often make it looks easy, but there are plenty of fix and flippers who lose money. The trick is to find a property that looks worse than it is, or one where the owners aren’t aware of the home’s true value or potential, and then know what can be done to fix it that won’t blow the profit margin on the project.
In either scenario (buying a rental or doing a fix and flip), accurately assessing the current value and condition of a property and knowing what needs to be done to it is critical to generating a good return on your investment.
Given Storey Real Estate & Construction’s decades of experience managing rental properties and performing renovations, they have a unique ability to help you determine if a property is a good fit for your investment goals. Paul is happy to give advice on pricing, the highest-impact changes to make to the property, and guidance on best practices for being a landlord or offering rental management services. We have invested in many properties over the years and would advise you based on our own years of experience.
We offer some tips on managing a rental property here.
Please contact us to talk more about your needs, and we’ll work with you to maximize your investment.