With all the rage over cryptocurrency and investing in stocks, many young adults are still using real estate investing as their portfolio’s strength. According to a recent survey, 36% of millennials prefer real estate investing as their main strategy to accumulate wealth. But young adults aren’t the only ones using this method – most Americans are, too. In fact, 31% from all backgrounds are harnessing the wealth building power of real estate investment.
When it comes to investing, real estate is a smart way to diversify your portfolio. However, there are many investors who think this is off-limits to them due to their lack of knowledge. It’s time to change that. Read on to learn how you can start investing in Arizona real estate.
1. What is Your Situation?
Where do you see yourself? Where do you want to go? Who do you want to become? What are your goals? Your career path? The answers to these questions will help you develop an investing strategy for the future, along with the best type of loan for your real estate investment.
2. Gain Leverage
In general, most people believe the only way to purchase real estate is with a 30 year fixed mortgage from a traditional lender. However, depending on your lifestyle, there are other loans available. Taking the time to educate yourself about the different options available to finance a home or other real estate property will shift your entire belief system and you’ll see that you have access to funds through channels you never knew existed, such as adjustable rate mortgages and interest-only mortgages.
3. Compare Mortgage Loans
The loan you choose is a well-planned product, and the product you want to select is the one with the lowest interest rate and the highest stability. Use a mortgage calculator to help you do the math and compare different mortgage loan products.
4. Gather a Strong Team
You can’t and shouldn’t go this alone. And you should be careful about who you decide to place on your team. Having a financial advisor is the first support system you’ll need. Next is an experienced real estate agent. Both professionals will ask the right questions and guide you along the right path to success. Tip: Keep an ongoing relationship with your mortage loan officer as he or she will be able to give you information regarding the market and when it might be a good time to refinance.
5. You Need to Plan for the Future
When thinking about the future, consider that rental properties provide both investment appreciation and cashflow, but they may not provide them at the same time. For this reason, it’s important to determine why you’re investing in the property. Do you want cash flow now and in the future, or are you looking to make a profit once the property’s value goes up and you sell? These are important details to know before investing in a property in Arizona and will determine what property you choose to purchase.