Redding home values have gone up 6.8% over the past year. Should you consider buying an investment home?
Many people have done just that, and chosen investment properties as a way to diversify their holdings. You’ve probably heard stories of people buying a home, renovating it, and reselling it at a higher price. This does happen – but in most cases we’ve seen people invest for the sake of renting.
Renting allows you to have a steady monthly paycheck, and then any appreciation on the home value is an added bonus. Sounds good, right?
Let’s evaluate whether you should pull the trigger on investing in Redding real estate.
Why Invest in Redding Real Estate?
First, there’s several benefits if you can afford the down payment on an investment home.
- Cash Flow – Renting the property to tenants means you can create positive cash flow. Your mortgage payment will likely be less than what you’re charging tenants, giving you a second income.
- Appreciation – Appreciation is the increase in the property’s value, which occurs over time. Any improvements you make to the house builds even more equity.
- Tax Benefits – The government typically allows owners a tax deduction of their property over its lifespan. An investor can also claim the interest portion of their monthly mortgage payment.
- Leverage – Leverage is when you borrow capital to increase the potential return on investment. This is a powerful tool for real estate investing. You can invest $10,000 into a down payment and then have a property valued much more than that.
And specifically, Redding real estate offers it’s own advantages as well. This source on Zillow shows graphs of home values in the city and trends we’ve seen the past 3-5 years.
And it’s predicted that these trends will continue – with the median home value increasing 3.2% over the next year.
Do You Have Time to Invest in Redding Real Estate?
One of the most common questions we get is whether you can work a full-time job and still have time for investing in real estate. Here’s the short answer – Yes.
The kind of real estate investing you might see on television is typically intensive and demanding. This isn’t common. The amount of time you spend is largely up to you, and also depends on your investing strategy, your skills, and your timeline.
You can still build wealth and keep your day job. In fact, there’s several advantages to this method over full-time investors. You won’t have to rely on the cash flow, and you can reinvest all of your profits to achieve even more growth.
But if you don’t have much time to waste, be sure to stay efficient and avoid these investing mistakes.
How Much Money Do You Need to Invest?
It may not be the easiest option, but investing in Redding real estate without a large amount of income is certainly possible. The key to investing without much money is asking yourself this – What do you bring to the table?
If you have the time and knowledge to invest in property, but don’t have the money – find someone who does.
Many investors use very little of their own money when investing in real estate by using one of several methods that include:
- FHA 3.5% down payment loans
- Using USDA or VA no-down payment loans
- With home equity loans or lines of credit
- Using private money
How Much Money Will You Make?
One of the largest draws towards real estate investing is being able to make a large amount of money with little involvement. However, it’s certainly not a “get rich quick scheme”.
Investing in real estate takes planning, patience, and persistence. Don’t expect to make millions in your first year. Instead, plan on creating a business plan that will steadily grow year after year. Start with one property and consider how long it would take before you could purchase a second.
There are no shortcuts to investing in Redding real estate, but the rewards are sweet for those who are willing.
The views, articles, postings and other information listed on this website are personal and do not necessarily represent the opinion or the position of American Pacific Mortgage Corporation.
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