The Phoenix metro area is currently one of the healthiest real estate markets in the country. It’s particularly a great time to invest in a residential property with multiple units (apartment building) right now, especially if you plan on flipping that property for a profit or holding it and renting the units out to tenants. Here are a few tips worth following to make sure you’ll always stay at the top of the market when it comes to Arizona apartments:
Take the Current Climate into Consideration
Though our real estate economy is strong right now, the current climate is very much a “sellers market”. This means there is a lot of demand to purchase apartments, and so as a seller you are able to price your property higher and get more gross profit in return. If you are fixing up a property and plan on selling it, make sure you do so relatively quickly because things will not always stay this way. Depending on your current financial situation, you may want to consider doing a 1031 exchange to delay your tax liability.
Likewise, if you are planning to buy, you should be prepared to shell out a bit more than you might have originally intended because you’re buying in a sellers market. You also need to do your research to make sure you’re still paying an appropriate amount and will meet your ROI (return on investment) goals if your intention is to buy and sell or rent out. That said, while it may seem like a good idea to wait to purchase until prices go down, the truth is that there’s no telling exactly when that will happen. Besides, wait too long, and there’s the very real risk of losing the property to another buyer.
Know That It’s All About Location
Even though Phoenix is a strong real estate market overall, not every piece of property here is a worthwhile investment. The “hottest” areas to sell in are those that already have been established as a longtme desirable location or those that are “up and coming” or “transitioning” neighborhoods. Renters and buyers will always be most drawn to areas they can see a future in.
If you currently have a property you are interested in selling or renting out, take a look at the surrounding area and recent real estate sales history. This will give you a more realistic look at what you can sell the property for. In many cases, it may be higher than you initially thought! In situations where the estimates are lower, you may be able to save yourself from doing some expensive renovations that are otherwise unnecessary.
Make Sure You Have the Right Financial Backing
Whether you’re buying apartments, looking to fix up and sell apartments or are simply looking to increase the value of your current property, it’s important to make sure you have the funds to do so. After all, the last thing you want is to get caught in the middle of a project without the financial means to finish it! Waiting too long to finish can even mean missing out on the current sellers climate. Getting a bank loan is one way to remedy the problem, but it takes a lot of time to apply and get approved. Even upon approval, there may be stringent rules of the loan that you have to follow.
It’s therefore worth considering far more flexible and fast-approval options, like a hard money loan. Contact the Barrett Group today to learn more about your hard money loan options and how we can help you achieve your real estate goals.