February 21, 2022 | MagMedLife
If you’re thinking about investing in California real estate, you’re on the right track! The Golden State is a great place to put your money, and there are lots of opportunities to make a good return on your investment. In this guide, we’ll walk you through the basics of investing in California real estate, from finding properties to securing financing. Keep reading for all the info you need to get started!
Evaluate The Threat It Poses To Your Overall Financial Well-being
You should not invest in California real estate without first making sure that it won’t affect your overall financial situation. Your investing strategy should follow the basic principle of investing, which is to minimize risk while investing for your future. You should make use of an investing calculator if you are unsure about what kind of money you will be needing later on. Proper research and strategy can help you minimize risks when investing because an informed decision serves as a good basis for investing.
Before getting into investing in California real estate, you need to learn more about your risk tolerance. A good rule of thumb is that if you don’t have enough money saved up that you could live on for six months or more, then investing might not be the best option for you. At this point, many people turn to invest their excess cash in stocks through their retirement funds, but investing in California real estate is a good alternative.
Most people would rather not invest in California real estate because it typically takes a lot of money to simultaneously buy and improve a property. When investing in California real estate you should make sure that if you are financing any part of your investment, it is fixed-rate so you can pay the entire thing off within six months or less. If investing was as simple as watching your bank account grow, no one would need this book!
Learn The Factors That Matter Most
Investing comes with many different factors, variables, pieces of information, and pieces-of-the-puzzle that need to be taken into consideration prior to investing. Research needs to be done, proper professionals have to be consulted so as not to leave out essential factors or details which could result in an investment opportunity being missed completely.
Knowing what factors matter most, having a better understanding of what you’re investing in goes a long way towards helping investors make the investing process less overwhelming.
When investing in California real estate, there are some key factors that need to be considered prior to investing, such as the neighborhood itself, crime rates, property taxes, and trends in the area, environmental concerns and studies done on the area, blighted areas/areas of possible improvement, investing or rehabilitating a building versus buying a turn-key home or building, and so forth. Those who regularly invest in California real estate do so because they understand how important it is to research an area before investing.
Know Your Goals
Understand your reasons for investing, what you want from it, how much risk you are willing to take on and why investing in California real-estate will help you achieve the financial freedom you’re after.
People choose to invest in California real estate because of the financial freedom they want or need or their desire to create income for themselves that doesn’t require them to stay at work all day long. Being clear about your motivations and expectations makes it possible to select an appropriate property and gain the most out of investing in California real estate.
You should have clear goals in mind. These goals are usually being debt-free, investing for retirement, investing for college, or investing to build a portfolio of real estate properties. Your goal might be different but the journey is similar and you must start with these basics.
Find Out The Different Niches In The Real Estate Market
Many investing newbies have a hard time figuring out the investing market as there is no one-stop-shop to buying and investing in California real estate. Hence, it is important to learn all of the different investing niches before investing your money into an investment property. This way you will know what investment opportunities are out there and how each opportunity differs from one another. If you’re willing, here’s an overview of the three major investing niches:
- Rental Properties
Buying rental properties for income or capital appreciation is something that most people do when they invest their money into California real estate. A lot of people like to buy rental properties because they can be easily managed by someone else (such as a property manager) and it offers steady income.
This investing niche is considered an “easy” investment because there are no significant renovations needed, the cash flow is predictable since you know your rental rate, and it’s a less risky investing market.
- Wholesale Deals
One investing niche that most beginners overlook is wholesale deals. Although investing in California real estate is more of investing in residential properties, you’re able to find deals that can get you a decent return. Wholesale deals are investing opportunities where you purchase at a discounted rate and then re-sell it at market value.
This investing niche is good for people who want to get themselves familiar with the investing market and earn some quick cash. However, wholesale deals may not be reliable as some deals might fall through and require additional time on your part researching properties and finding another deal.
- Commercial Investments
The third investing niche that one should consider is investing in commercial properties such as self-storage units or hotels. Investing in California real estate becomes complicated when thinking about buying commercial properties because you need plenty of capital to invest in this investing niche. This investing niche is usually reserved for investors with a higher level of investing experience and financial freedom.
Investing in California real estate can be a lucrative way to build wealth, but it should also be carefully considered. Do you know what factors matter most for your situation? If not, we’re here to help! Call us today and let our team of experts walk you through the process of finding out how much house is right for you, or if this investment strategy might actually pose more risk than reward. We look forward to hearing from you soon!
Are You Looking to Invest in Real Estate in Northern California?
The top real estate agency in Northern California, Sexton Group Real Estate | Property Management in Berkeley, California is a boutique real estate company specializing in residential sales for properties throughout the San Francisco Bay Area. To better serve our clients we have three local offices, one in the heart of picturesque Berkeley, one near downtown Oakland and the third in the heart of historic Lafayette, California. The Sexton Group encompasses the essence of Berkeley’s charm, Oakland’s history and Lafayette’s family-oriented vibe all with a relaxed, down-to-earth nature. We are an amazing group of real estate agents whose wealth of experience spans more than 25 years in the industry. Looking to buy a home in Contra Costa or Alameda County? Contact us today for your free consultation!