If you’re considering investing in real estate apart from stocks, bonds, and mutual funds, then you’re not alone. This type of investment can be highly lucrative because of several factors such as asset appreciation, cash flow, tax benefits, and many others. Just like with the other investment options, it comes with risks and challenges but the rewards when you make a sound investment decision in real estate can be considerable.
One of the steps you need to do to position yourself towards real estate investment success would involve choosing the ideal property in the right market. It’s true that investing in a property close to your home is a bit easier to do, but the fact is that the best markets are often found not in your backyard. In fact, you might consider taking a look at the top 4 best places to invest in real estate when it comes to finding the next investment opportunity. Notice that these markets are mainly in the Midwest and South East United States.
1. Birmingham, Alabama – Birmingham is a prime market for real estate investors to take a look at. The residential real estate prices here are affordable, wherein the median price per square foot for listings would range at around $51. Home values here are expected to rise by over 2% within the next year, and the rental rates are affordable for consumers. Apart from this, an approximate of 32% of Birmingham homeowners are behind on their mortgages, which creates an excellent opportunity for investors looking for a great deal. This also means that the rental market may remain stronger in the next few years.
2. Jackson, Mississippi – You can find some great real estate deals in the Jackson metropolitan area. This is due to the residential housing prices being declined by almost 3% over the last year, and the median home value is just about $61,900. However, it is projected that residential home values will increase by approximately 1% within the next year. In addition, rental rates are affordable, and the rental market will remain strong in the coming years.
3. Kansas City, Missouri – The real estate in Kansas City metropolitan area is relatively affordable. Residential properties in the area have a median list price of $112,900 and the rents are not that expensive. Investors can take advantage of foreclosure deals when they are planning to invest here. An estimate of 5% of mortgages in Kansas City are delinquent, so you might purchase a foreclosed property from a bank or make a lower-than-asking price offer to the distressed seller.
4. Memphis, Tennessee – Compared to the other areas of the country, Memphis has relatively low-priced real estate, and the median list price per square foot of residential properties in the metropolitan area is around $50 per square foot. The current value is somewhere close to a 3% increase over the last year, and the housing prices are projected to appreciate by as much as 2% in the coming year. Also, the rents are relatively affordable, which makes the rental market strong.
Looking at beyond the market
Learn about the best places for real estate investing is a great step towards this investment venture and market conditions are one of the factors to consider. Once you know which market to invest in, you also need to find the ideal property to buy within the market. Understanding real estate investing fundamentals is a great to make a sound investment decision.
When you have a real estate investment, you can benefit from the long-term appreciation and the regular cash flow generated by the property. However, the overall return on investment will vary on several factors that needs to be carefully reviewed and analyzed by the investor. Selecting the right market might require you to look out of state and there are other factors to consider on the actual property before securing a deal. It may take some time to find the right property to invest in, but the time and effort you put into it will be rewarded with a lucrative return on your investment.