Investment Properties 101

Philadelphia, Pennsylvania, USA alley in the fall.

Real estate investing is an exciting and continually evolving venture. Many people are reluctant to start buying and selling properties because they find the process too confusing and overwhelming. Real estate deals are about developing a framework of your priorities and using this information to guide you toward unique opportunities.

This industry is a lot of fun when you formulate a plan based on your own investment goals. To help you begin, we want to share some useful ideas about the basics of investment.

The Nuts and Bolts

You have probably heard these terms before but may not know the meaning or why they are important to investors. Let’s go over these key terms:

•         Cash on Cash: This how much cash an investor earns on the amount of cash they invest in property.

•         Return on Investment: The ROI is a financial tool that measures the likelihood of turning a profit on investment relative to the cost.

•         Rent roll: This is an assessment by the owner of rental income earned on a property which is used to determine the value.

•         Capitalization rate: The cap rate is the return on real estate based on expected income returns.

Simply put, these tools track how investments are performing in relation to money spent and earned. They provide the structure for investing, so you have a clear idea of the value of your portfolio and how to make your next moves. Each of these provide different ways to evaluate an investment property to make sure that it works for you. 

The Fun Stuff

Take a walk around some Philly neighborhoods, and you will see the eclectic, warm mix of multi-use living spaces with homes, businesses, restaurants and shops. Look for areas with appeal and unique character, where people spend time engaged in social activities with all the amenities they desire close by. These are neighborhoods people love to live in and are great places to find properties.

Some real estate you can buy and hold and assess how to market over time. Certain homes you can fix and flip right away with some light rehab. Look for properties that have good bones, even if they need a little fixing up. Duplexes and triplexes are smart investments, because you have the advantage of multiple-tenant payments from one property.

The Time To Jump

People often ask the question, when is the best time to invest? The answer is now. The goal is to find the right properties for you in the current market.The Ian Perler Team shares our expert knowledge and sound advice with our clients. We understand local market trends and assist buyers, investors and developers with finding quality investment properties. Contact us to learn more about our services.