Tips for First Time Real Estate Investors & Where to Find Hot Markets

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Getting Started

If you browse the real estate section of today’s newspapers and pay attention to the market news, you’ve probably already heard that 2012 is a great time to invest. Take low home prices, add rock bottom mortgage rates and voila! You get a formula for favorable investing conditions.

If this is you’re first time considering investment property, take a look at these basic tips. They’ll give you a good starting point for your investment real estate journey.

  • Go for long-term benefits. Rarely do investors make a fortune on short-term ownerships. It makes more sense to invest in a property that has long-term cash flow assets.
  • Aim for positive cash-flow. While we’re on the subject of cash, make sure your property is capable of generating steady stream of it. Now before you go searching for a gold mine, keep in mind that there is a difference between positive cash flow and beaucoups of dough. The money generated by your investment property may be modest; the important thing is that it is steady, reliable, and stays out of the red.
  • Invest in something you love. It doesn’t make a lot of sense to dump money into something if your heart isn’t in it. Also, choose to invest in something that fits in with your lifestyle. For instance, buying a bed and breakfast will require a lot of time and energy (as you’ll essentially be running a business). On the other hand, purchasing a small vacation home or beach condo may bring in less money, but owning it won’t be as demanding.
  • Research the area. Beware of declining home values, high vacancy rates and generally poor economic conditions.
  • Think conservatively. It’s always better to err on the side of caution. Underestimate your monthly rental income and overestimate the costs owning property.

Top 10 US Real Estate Investment Markets

Wondering which U.S. cities are investment hot spots? Take a look at this recent ranking, published by FinestExpert.com, an online real estate resource.

Top 10 Markets in the USA (for cashflow)

Palm Desert, CA
Green Valley, AZ
La Quinta, CA
Detroit, MI
Warren, MI
Westland, MI
Lancaster, CA
Homestead, FL
San Bernardino, CA
Douglasville, GA

It would appear that the state of California is a popular place for investing, with four cities making the top ten. Michigan’s not far behind with three cities making the cut. And, speaking of California…..

California Real Estate Snapshot – Hot & Cold Markets

View of San Francisco from Golden Gate Bridge.

Here’s some information we’ve gathered from Trulia.com, a well-known real estate site. Please note, these figures are estimates based on public data and can change without notice. Talk to a real estate professional to get the most accurate, up-to-date market information. Mortgage rates in California continue to remain very low and you can always quickly and easily check rates online at forthebestrate.com.

California Real Estate Information

Estimated Median Home Value: $294,100
1-Year Change: -5.1%
Median List Price: $285,500
1-Year Change: -2.2%
Median Sale Price: $276,900
1-Year Change: -6.7%
Homes Foreclosed: 11.2/month (per 10,000)
1-Year Change: -7.6%

The San Jose Metro saw the least significant drop in home values at -0.3% year-over-year and the Yuba City Metro saw the greatest drop in values at -12.0% year-over-year.

The Salinas Metro saw the greatest increase in home sale price at +4.5% year-over-year while the Hanford Metro saw the greatest drop in sale price at -17.3% year-over-year.

For more information, visit trulia.com/local-info/CA-home-value/r_9/ or talk to a licensed real estate agent in your area.

Steph Meyer is a contributor to the ForTheBestRate.com Blog and keeps us up to date on interesting happenings within the world of home financing and real estate. She’s got a quick wit and keen eye on making smart financial decisions. My Google Profile+

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