Real Estate Investing
Gainesville Real Estate Investing
Everyone who invests, whether in a stock portfolio or real estate, wants a return reflective of the risk they’ve assumed with their money. Real estate has long been an asset class used to diversify investments by people of all experience levels. If you’re considering buying an investment property in Gainesville, FL, Rabell Realty Group has a few quick tips to help you get started!
How To Know If It’s A Good ROI
The actual return on investment (ROI) relies on things in and out of an investor’s control, the property’s characteristics and the local market. Characteristics can be adjusted through upgrades and improvements, such as installing energy-efficient lighting. But when it comes to how to invest in property, the leg work done before investing often correlates to receiving a good ROI.
Talk To Another Property Investor
Gainesville is full of local people who are also property investors. They’ve put their time and money into our local market and know what works and what doesn’t. Most will be happy to share the information they’ve gleaned from investments and help you avoid mistakes they made.
Know Your Risk Tolerance
Any investment comes down to risk versus return and for commercial real estate investing, you’ll want to understand your risk tolerance before signing the final paperwork. It’s generally understood that the greater the risk, the greater return. Remember risk tolerance is different for every investor so having a lower tolerance isn’t a shortcoming compared to others.
Read & Research
Between the internet and books, you won’t lack for material and information to read when thinking about buying an investment property. Things to keep in mind include:
- All costs, including utilities, insurance, and property taxes;
- How the property is zoned;
- How it compares with nearby and similar properties; and
- Visit the potential property in person.
How To Calculate ROI Before Investing
Though there’s a continual debate over which method is better, it’s best to go with the method which you’re most comfortable with. Some people prefer to pay cash rather than incurring debt to invest in commercial real estate while others are more comfortable using the financial leverage debt gives them.
Cost Method
The cost method divides the property’s equity by all costs, such as purchases and repairs. It doesn’t use any financial leverage which is often found through a loan.
Out-of-Pocket
The out-of-pocket method uses financial leverage and therefore has a higher ROI calculation than the cost method. Because of its higher ROI, most home investors in Gainesville prefer it to the cost method.
Real Estate Investing In Gainesville
Gainesville, FL has many real estate investing opportunities perfect for a new or seasoned investor. Contact Rabell Realty Group today to learn about these opportunities from our experienced team of realtors!
Income & Appreciation
Income for commercial real estate comes from the rent outlined in the lease agreement with a company or tenant. Examples include an apartment building with year-long leases to individuals or families and a five-year lease agreement with a company for office space. For residential investments, it’s simply the monthly rental income from a tenant.
An investor can also earn a positive return through appreciation of the property. Since real estate is considered a scarce asset due to the land it sits on, if demand increases, so will the property’s value. Conversely the value will increase if improvements to it increase its ability to earn income.
Best Places To Invest In Real Estate
There isn’t one place better than another to invest in real estate. In fact, some of the best places to invest in real estate are the places you feel comfortable investing in after researching and talking with other property investors. The team at Rabell Realty Group has years of experience in real estate investing and will help you find an investment property best suited to your goals!