Why let your money stay idle in the bank when you can grow it big time with Real Estate Investment?!?
If you have been working for some time, you probably have accumulated some form of savings, and the first mistake we don’t want to make is to let the money stay idle. There are many ways to work your money hard, and one highly recommended approach is through real estate investment. Here is why:
1. If you choose the right property, it can appreciate in value over a shorter period of time, hence providing good profits when rented out or re-sold.
2. Real estate plays a critical role in advancing towards financial freedom, especially for those with the passive and recurring income through rentals.
3. Real Estate has less volatility as compared to stocks and shares, hence lower risk.
4. In Kona, both the long term rental market and vacation rental market are profitable. There is a need for long term housing, and if you have a long term rental available, it is easy to get quality tenants in your home so you can enjoy passive income each month. The vacation rental market is also lucrative, as Kona is a premium tourist destination.
It is all about the 3 Fs: finding the right property, funding that property, and farming that property (making profits).
Given the thousands of properties available in the market, we want to choose the right property, so that the value can go up, and it can be easily rented out and resold when desired at a good price.
To choose the right properties, we consider the following critical factors:
In real estate, size matters! This is the first impression when a potential tenant or buyer steps into your house. Besides considering space for the living rooms and bedrooms, extra spaces like garages, lanais, backyards, storage, and car spaces are important.
3. Swimming pool
In Hawaii, a swimming pool is a huge draw. If you want to rent your property (and particularly if you want to vacation rental it), I would highly recommend a home with a pool.
4. Age of the property
This is important in determining its value. Older houses have much different styles from modern houses, and this can be both a pro and a con. It is a pro in the sense that if your house preserves some nice traditional architectural designs, and that is highly loved by the prospective client, you could take the opportunity to increase the selling price, hence making better profits. It is a con in the sense that if the client prefers houses with more contemporary designs, this could have a dire impact on your older property given that it is harder to sell or rent. In Hawaii, if the house is older, there is a higher chance it has termite damage.
Price is definitely in the consideration, hence it is essential to do a market research in the neighborhood for similar properties you are looking for before jumping to a decision. Also, if you intend to take on financing, you should check on the availability of loans and interest rates to ensure you can afford it and qualify for it.
6. Condition of the property Arguably, this is one of the most important attributes to look out for in a property. You may have found the best location, the biggest size at the most bargain-able price, but if the condition is inhabitable, what does it make of your newly bought property? Nothing !! Hence, it is crucial to observe the condition of every potential property and take into account the potential repair fees required for that property. Factor this into the overall pricing of the property to see if it is still worthwhile to buy that property.
To conclude, I have shared with you some valuable insights about to why you should adopt real estate investment as one of the very feasible methods to grow your money and create a steady passive income to achieve your long term financial freedom goal and also essential tips for choosing a property to fulfill that aim.
Contact us at Lokahi Properties today. We specialize in both long term and vacation rentals and know what it takes to have a successful rental property!
Dana Kern is the Principal Broker at Lokahi Properties