Chapel Hill real estate and Durham real estate are known as idyllic and convenient places to live for families and academics, but are they smart investment options? Not every real estate market has the necessary qualities to make for a smart investment. When deciding where to buy rental or investment properties, strategic research and planning will ensure that you don’t end up pouring money into an asset that isn’t going to bring you the returns you want while filling your life with headaches. The Durham real estate and Chapel Hill real estate markets have unique benefits for people looking to invest. Here, Chris and Kevin Knapp offer five ways that investors can mitigate their risk in real estate, as well as some aspects of these markets that make them smart investments.
Mitigate your real estate investment risk
Unfortunately, real estate is not a “set it and forget it” type of investment. Acquiring a property is a complicated matter that requires attention and care. While this doesn’t have to mean it's an ongoingly arduous investment, it does mean that you need to start your investment journey with some goals. There are many ways to invest in property. Even owning your own home is an investment that can yield returns down the line. If you are investing in property to further expand and diversify your portfolio, start by asking yourself some questions. Do you have the bandwidth to manage a rental property? Are you willing to hire employees such as a superintendent? Are you more interested in owning a vacation property you can use as well as rent? Investing is a lot less risky when you know exactly what you’re looking to get out of it beyond a financial return. Begin by envisioning the ideal situation that you can manage with your current schedule, financial standing, and desires. Then, you can make a concise plan for achieving your specific goals.
Location, location, location
Every real estate agent knows that location is everything, and the location of your investment property matters immensely. Firstly, know that your investment property doesn’t have to be in the region you live in. While investing in property that isn’t in your town does present certain obstacles, it can also open up your investment to much larger returns. The best example of this practice is owning a vacation rental. Say you live in a cold-weather climate but purchase a vacation property where the weather is warm all year. This means the property can be used by you and become a flourishing business that pays you consistently. Popular vacation towns generally have consistently high traffic economies, whereas a market like a comfortable suburb can fluctuate in its popularity and relevance. If you live in a location like a major metropolitan area, properties in those areas will always be in demand due to the role as cultural and workplace hubs. Chapel Hill real estate benefits from a major university in town, to which new faculty and students continually look for housing.