The Blue Chip of Affordable Real Estate
Consider investing out of your local market. Just because you don’t live in a market does not mean you should avoid investing there. Purchasing power is critical to the success of a real estate investor. Due to high cost of entry, it is easy to be priced out of most primary markets.
Owning rental property and real estate investing in another market may seem difficult or harder to navigate at first. However, when taking a strategic approach to affordable real estate investing, leaving your comfort zone and home market can actually make it easier to reach your financial goals. You may already have to travel for business or work purposes. Apply this concept to your affordable real estate investing strategy. Hopping on a quick flight or driving a few hours can quickly reveal more opportunities which were previously not present.
A glance at the S&P 500 or the Dow 30 reveals that affordably priced stock of quality companies do exist. These rare combinations of affordable pricing and quality assets allow for more purchasing power per dollar without scarifying quality. This is no different in secondary market affordable real estate investments, specifically property priced below $100,000.
Quality affordable real estate investment houses can be identified ranging in price from $50,000 to $100,000. The primary focus should be single family homes in most cases rather than condos. Condos do have their benefits however even with a great purchase price, external cost such as uncontrolled association fees and charges can eat away your profits and cash flow. Creating a portfolio of single family homes offers lower risk because they can be purchased with cash or at lower mortgage balances. The smaller down payment means low barriers to entry.
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