Investing in Real Estate is like investing in anything else. Before we answer the question, let's define a couple of things.
- Real Estate Investing - Over the last 10 -15 years, it has been common practice to refer to owner occupant home buying as an "investment". Let's be clear, it is not the same as Investing in Real Estate. Real Investors understand the markets and buy properities with the intention of using the properties to make money. They may buy to rehab and resell. They may buy to hold for long term and rent. Either way, the winners understand that real estate investing means INVESTING dollars for a return.
- Buying a Residence - The reason I say buying a primary home is NOT and investment, is due to the fact that this is your home. Your intention is to live in it and build memories. It is not for making money, however you might when you sell. Too many people were swooned into buying real estate as an investment that turned out costing them more than they bargained for. I pray that professional Realtors talk sense into their clients to buy homes that they can afford for the long haul this time around. Foreclosures and Short Sales are not the ideal ending for a young family trying to build their American Dream. Buy a home to live in and want to settle down in, not as an investment.
Now that we're clear on those two items. One of the first rules to investing is Buying right. One of my mentors used to always tell me that you make your money on the buy, not the sell. Why? If you're hoping to make your money on the sale, it is called speculation and is quite risky. Buy your properties at the right price, and the market conditions become less important.
Market conditions are important to help you make your decisions on what price you may offer or what your exit strategy may be. Albuquerque happens to be a fantastic rental market. You may want to buy low to hold on for great rental income.
Albuquerque also has a 'bread and butter' sales price between $130 - 200k where people are buying even in this market. If your strategy is to buy and rehab to sell for a profit, know your cost to repair and the margin you're looking for. When you do, your purchase price becomes much clearer.
If you are buying to live in your home for ever, stop looking at this home like you would an investment and start deciding if this is where you want to build your memories. If you are in fact looking to build a real estate investment portfolio, then start treating it like an investment.
It is always a great market to buy real estate. The variable is you and your decision making process.
For more information, return often to learn how you can build your Real Estate portfolio. Feel free to submit your questions and comments below.