There’s a reason buying and selling real estate has become such a well-known form of financial investment: It works. There are many benefits to real estate investment, whether it concerns buying property at a low price and selling it when prices increase or renting out an owned property to collect rent. Whether it’s appreciation, cash flow or federal tax benefits, many people have found that real estate investment is a great way to supplement their income. In fact, for some people, real estate investment is the primary way they generate income.
Of course, as with any investment, it’s not wise to jump in and begin spending money with no plan in place. A number of factors affect the success of real estate investment, and it’s important for individuals to take these into account when purchasing property.
Employment
When employment is high, it means more people are earning a paycheck, and therefore have the ability to make home purchases. In areas with high employment numbers, purchasing property with the intent to sell makes sense. As more people with jobs enter into homeownership, inventory drops and prices rise. At the same time, if an investor wants to play the long game, purchasing property for low prices in areas with high unemployment numbers can offer great savings and result in lucrative opportunities if the economic climate of the area improves over time.
Construction
Another factor to stay up to date on is construction. If more homes are being built, the value of a property is likely to decrease. However, if construction is limited, home prices will increase due to high demand and limited supply. Commercial property also presents opportunities based on construction. Buying a retail space in an area that is attracting construction means more opportunities for customers, increasing the value of the space. Also, owning commercial property in an area where space is at a premium means the chance to charge higher rents, increasing cash flow.
Purchasing investment properties
Sometimes the biggest obstacle to real estate investment is finding appropriate properties. Fortunately, property auctions make this process easier, giving investors a wider array of properties to choose from, as well as bringing them together all in one place to make buying multiple properties simpler.
In fact, customers of Auction.com can not only take advantage of the benefits property auctions provide, they can also access the Auction.com Research Center, which provides data on employment, construction and other relevant information that can make investment decisions easier.
