Best Real Estate Investment
Real estate investing is a terrific way to build your overall assets and future cash flow. Smith & Associates Real Estate discusses the best real estate investments to consider for someone thinking of becoming a real estate investor.
Real estate is a smart investment because it typically has an excellent return potential. Real estate investing also allows you to diversify your portfolio to protect yourself from recessions and other adverse economic conditions like the coronavirus pandemic.
But how do I best invest in real estate?
The answer is there’s no one right answer. Consider your situation and determine the best option for you. There are several ways to invest in real estate, and each one has different capital requirements, risk levels, and investment dynamics.
There are several factors that can determine how well your real estate investment performs. Let’s look at the nine best real estate investments you can make.
1. Buy some rental property. One of the most common ways to invest in real estate is to buy an investment property to rent to tenants for income. For many folks, this is a terrific way to invest in real estate to generate wealth and income. The return potential is strong, but it does have some drawbacks. One is that it can be expensive to purchase your first rental property. Also, even if you hire a property manager, rental property ownership can be time-consuming. However, once you get a system down, owning rental properties can generate a substantial passive income.
2. Purchase a vacation home to rent. A vacation rental is different than a long-term rental property in a few important aspects. First, you can enjoy the vacation home when it isn’t occupied. Plus, it can be significantly easier to finance a vacation rental. That’s because it may meet the lender’s definition of a second home, and you needn’t use your rental income to qualify. Lastly, a vacation rental typically will garner you more income per rented day than a comparable long-term rental property. However, note that the effort involved in marketing and managing a vacation rental is more involved than a long-term rental. Property management can also be much more expensive.
3. Flip homes. We’ve all heard of “flipping houses” when an investor purchases a home, makes improvements and then sells it for a profit. There are plenty of TV shows that show how easy this is, but flipping houses can be a full-time job, and there’s considerable risk.
4. Build a spec home. This is similar to fixing up and flipping a home as far as investment dynamics; however, it also includes the initial step of building a house from scratch. Building a spec home can be an especially smart investment strategy where there is a limited supply of new homes from which to select. However, spec houses are more time-consuming because it can take a year or more to build a house from the ground up. There are contractors and sub-contractors that must be coordinated, along with permits and other issues. And the longer timeframe also means additional risk from market fluctuations.
5. Invest in a REIT. Real estate investment trusts, or “REITs,” can be a great way to invest in real estate. There are quite a few REITs that trade on stock exchanges, allowing you to purchase them easily without much capital.
6. Join a real estate crowdfunding opportunity. An experienced real estate developer finds an investment opportunity, and rather than funding the whole project with their own money and bank financing, the developer raises some of the necessary capital from investors like you in exchange for an equity interest in the project. The return potential can be significant, and it allows you to diversify your investment strategy and let you leverage the experience of the developer. But unlike buy-and-hold real estate strategies, the value-add nature of crowdfunding adds an element of execution risk. Plus, liquidity is another big issue because it’s nearly impossible to exit a crowdfunded real estate investment until the property has sold, which may be several years down the road.
7. “House hack.” This is a hybrid approach of purchasing a home to use as a primary residence and buying a rental property. It usually means purchasing a residential property with two to four units and living in one of the units while renting out the others. You can also apply this strategy to buying a single-family home and renting one or more of the rooms. Since you live in the property, even a multi-unit residential property can qualify for primary residence financing. As a result, you can enjoy lower interest rates and lower down payment requirements than investment property financing.
8. Rent out all or part of your own home. While not a true investment strategy, with services like Airbnb, it’s easy to rent out your home when you’re away or to rent out a spare room in your home to generate some extra income.
9. Become a lender. A unique way to invest in real estate is to add real estate debt investments to your portfolio and finance a real estate project. Typically, you can make more from a debt investment than you can from an equity investment. However, debt investments as a whole have less total return potential than equity because when you invest in real estate debt, your return is limited to the income payments you receive.
Of course, there’s no law that says you have to go with only one of the options. The best real estate investments for you may be vastly different than the next person, based on your specific situation, your available capital, risk aversion, and long-term objectives. And some combination of these strategies could be the ticket for you.
Determine what you believe is most important to you and decide the best way to invest accordingly.
Buying real estate is always an exciting and worthwhile investment. Talk to one of our sales professionals about the best way for you to invest in real estate. Visit our directory to find the best Real Estate Agent for you or give us a call at +1 (833) 917-0676.
We all know that making improvements to your home can increase its value and add to its price at resale. However, knowing which types of improvements get the best return is important. This article will discuss the seven home improvements that will get you the most bang for your buck.
1. The Kitchen Remodel. When selling your home, the kitchen is a critical room. This is the best place to put your home improvement budget. An outdated kitchen with 15-year-old appliances could be a non-starter for many prospective buyers. HGTV says that you can anticipate recouping anywhere from 60% to 120% of your investment on a kitchen remodel. But the remodel should be within limits because you don’t want your kitchen to be head and shoulders above the rest of the house or the neighborhood. Your renovation projects should enhance your home—not price it out of the local market. A kitchen remodel should consider replacing old appliances with new, more energy-efficient models, refacing or replacing cabinets, installing new countertops, updating the hardware, installing a new sink and faucet, as well as updating the flooring and repainting.
2. The Bathroom Situation. Second only to the kitchen is the bathroom situation. And it’s a situation if your three- or four-bedroom home has only one loo. You can recoup the majority of your investment by adding a second bathroom. HGTV estimates that you can recoup 80%-130% of whatever you spend adding a bathroom… and if you have the space, a full or three-quarter bath is preferable. If you’re updating an existing bath, focus on a new sink, toilet, and fixtures. You should also consider updating the lighting and tile. One more improvement you can make to your bathrooms is reconfiguring your standard bathroom into an accessible one with wider doorways for wheelchairs, adding a walk-in shower, lowering light switches, and installing support bars.
3. Garage Door Replacement. A spanking new garage door can really make a statement and increase your home’s curb appeal. Research shows that recoupment is near 100% nationwide, and Remodeling Magazine says that a garage door replacement in the Tampa area is 95.1%,—making it a great project.
4. Siding and Window Replacements. Siding and windows that are old or damaged can have a dramatic negative impact on your home’s curb appeal and a potential buyer’s first impression. And as far as new windows, buyers are looking for homes with high energy efficiency ratings. Plus, because of our weather, windows in Florida must be impact-resistant.
5. Deck Addition. HGTV says that homeowners recoup 65%-90% of their investment by adding a deck. That’s good news because this is another home improvement that can be enjoyed year-round in Florida. Locally, you’ll recoup about 78% of your investment in a wood deck.
6. Repurposing a Room. Another valuable home improvement is to “reinvent” an existing space in your home. This might look like making a bedroom out of unused attic space or adding a small apartment in or over your garage—which may appeal to a larger family looking at buying your home.
7. Adding Energy-Efficient Insulation. In Florida, we know that climate control is a must. You can cut those costs by installing energy-efficient insulation that keeps you from heating or cooling the outdoors. Fiberglass, cellulose, and rigid foam board are frequently used, with blown cellulose and loose-fill fiberglass being the preferred methods in Florida.
Sprucing up your home for resale—or to enjoy before you put your home on the market—is a great idea. Use these tips and consider the areas of your home that a home improvement project will bring you the greatest return on your investment (ROI).
And just in case you’re wondering, renovating your backyard patio is seen as one of the least valuable home improvement projects, with a return of just over 50%.
Consult with a knowledgeable realtor in your community to learn what improvements will be of the greatest value and the highest return for your home. A realtor will analyze your market and see what has the greatest potential to make your property stand out.
Contact a Smith & Associates Real Estate Realtor, here.
Nick Churton, based at Smith & Associates Real Estates’ London Office, Mayfair International Realty, offers his thoughts on the efforts being made to keep buyers and sellers on the move.
Throughout the lockdown, agents and brokers have been working remotely. The past few weeks have been frantic. First, there were all the home sales, which had to be pushed past the finishing post. Even in lockdown, we have been able to do this within responsible guidelines. Then there are the deals that were only just tied up when the lockdown began. It is astonishing how many buyers and sellers have been keen to keep to their plans – even though they might have to add weeks and even months to transaction times.
But now we are also busy working with those who are already planning new lives beyond the pandemic. We are advising on marketing and even ballpark pricing – subject to final inspection. We know that keen buyers have penciled in viewing appointments for when the lockdown is over, having used superb video presentations to whet their appetites.
Of course, it isn’t fun. None of this is: for anyone. The virus has changed our lives and the lives of everyone with whom we work. But despite working remotely, we are all working together. Agents from around the world are working closely to keep buyers’ and sellers’ real estate dreams alive, even through this global crisis.
Working through the pandemic has been like peddling a bike up a steep hill. We have had to change gear. We will probably change gear again. But one thing is very certain; we will be in the right gear when it’s all over.
Learn more about Smith & Associates Real Estate’s London Office, Mayfair International Realty – click here
Learn more about Smith & Associates Real Estate’s global connections – click here
Nick Churton and Annette Reeve from our London Office, Mayfair International Realty, have a few words for real estate professionals handling the sudden and stultifying shock of a global pandemic.
The real estate business is cyclical. From time to time there are bumps in the road, brought on by economic booms and busts and natural disasters like hurricanes, fires and floods. We don’t like them but we half-expect them.
Then there are the bumps that we don’t expect: bumps like the Great Depression or world wars. Every real estate generation hopes that it will not have to deal with bumps like these. But our generation has been called to deal with coronavirus.
Global threats remind us that we are an international real estate family, with each nation experiencing in its way the tragedy and fear that such disasters bring – not just to us but also to our clients. No one is alone in this.
Sometimes our first inclination is to panic. We worry about what will happen, what our clients will do or think, and how we will manage the hiatus. The uncertainty can be paralyzing.
But we also know from the smaller bumps and world history that, given time, this tragedy will pass. Ironically, we also need to remember that the Chinese word for crisis is composed of two characters signifying danger and opportunity.
While conscious of danger, we must also be awake to opportunity. Probably not this week, but very soon, our clients will need every bit of our expertise, wise counsel and local knowledge. There will be people who have re-evaluated their lives and want change; there will be those forced through sad or difficult circumstances to move on, and those very alive to opportunity themselves.
The only thing we must not do is wait. The time to act is now. Now is the time to plan, learn new skills and, most of all, stay informed, interested and engaged.
This is the time to demonstrate that, now we have been called, this real estate generation will step up to the plate.
Learn more about Smith & Associates Real Estate’s London Office, Mayfair International Realty, click here.
Learn more about Smith & Associates Real Estate’s global connections, click here.
The greatest questions in times when there is uncertainty are “What should I expect today”, “What will tomorrow bring” and “What should I do”. You can rely on Smith & Associates to continue to serve the community as the skilled and trusted real estate advisors we have been and will remain. With that in mind, I offer you the following insights into the local effect of these unprecedented events.
Tampa Bay had a record-setting first quarter in real estate, which was the case broadly across many of the markets in the US. We are still seeing much of that success in current closings and inventory yet available. Of course we are seeing some market reaction as buyers and sellers adjust expectations and alter goals. Some choosing to wait and see, while others have made swift decisions. Each individual’s situation is unique and must be evaluated in total to find the correct path.
As many states, including Florida, have adopted new stay at home protocols, we have begun to see the effects of these actions upon the market as professionals and consumers adapt to sales and showings that can be done safely with buyers that have a need to purchase at this time. In our market, real estate activities have been labeled essential, as long as these actions conform to the current guidelines of size limits and social distancing. Together with your Smith Associate will be the best judge of the practices that are right for each situation.
Smith is adjusting strategies to accommodate for consumers limited movement through virtual showings, promoting with a more digital focus, fantastic photos and an elevated degree of electronic communication. Additionally, the closing process is being altered and advanced with safety and convenience in mind. Our administrators continue the 10-day pre-closing prep check to assure all is in order to progress smoothly onto successful completion of transactions.
Naturally, the market will slow in some price ranges and days on market will likely extend to some degree. However, buyers that have been waiting for the “right” home are venturing out for safe showings and buying homes. Of course some are testing values to see if sellers have felt any impact financially hoping to create some opportunity in price negotiation. It is early to tell, but as weeks extend to months, perhaps the trends will show some opportunity in certain ranges for properties not in top condition. Now is the time to get the home in great order so when you do come to market, the best presentation is offered.
If the home was on market prior and things have gone silent, it may not necessarily be isolated to what would be the typical considerations; price or condition, rather, the market may simply be in a pause until folks feel safe. After a period of readjustment occurs and stability returns in employment and our economy, routine behavior will reestablish and Tampa Bay will continue to be one of the best places to choose to live and enjoy life.
We at Smith & Associates, look forward to when buyers and sellers can become more fluid in their movement, but for now we have virtual, digital, and electronic solutions in action to service and support the needs of our consumers right now to accomplish the task of reaching the current goal. As time passes and we begin to see market changes, we will communicate further insights on values and trends with our team to deliver to the communities they serve as trusted real estate advisors.
May you and your family remain safe and secure and at any time we are glad to provide you with market information to assist in your decision-making process. We will continue to be your real estate resource and trusted friends in Tampa Bay.
President / CEO
With governments instituting tighter shelter in place restrictions and businesses shifting to the work-at-home model during the COVID-19 crisis, we want you to know that we are working closely with all our partners to be able to meet your real estate needs as efficiently as possible.
While our current situation is unique, we know that securing a low-interest rate is an important step in making an informed decision before purchasing a new home, and our team can guide you with personalized mortgage solutions. Our Mortgage lender, VanDyk Mortgage, is still generating individualized loan programs and has updated us on the market situation answering frequently asked questions regarding lending in Tampa Bay:
What is going on with appraisals?
While some appraisers are rejecting assignments, the majority are moving forward. Fannie Mae is accepting drive-by or desktop appraisal when we are unable to obtain a traditional appraisal. Many companies are working with skeleton crews during these difficult times so please allow for additional time to close as the appraisal process may take longer.
What happens if I lose my job before closing?
You need to be employed at the time of closing IF the income from the borrower who lost their job is needed to qualify for the loan. Without the income, the loan will not close or fund. If the income from the recently unemployed borrower is NOT needed for the loan, then the loan will close as planned.
Are you still able to verify employment?
All lenders will do a re-verification of employment at a minimum of 10 days prior to closing. With the current situation, we may not be able to use traditional methods to verify employment and will rely on alternative methods. These alternative verifications will be accepted and we do not expect any delays in the process if employment has remained.
What happens if I am on temporary leave?
If there is a leave of absence with one of the borrowers, and the borrower intends to return to work prior to the first payment due date, we may use their income to qualify. Many employees have been furloughed depending on their industry. Some of these situations, we can work with and still move forward with securing a loan.
Interest rates are low and real estate transactions are happening every day. You may have more questions and need more guidance during this unique time, but we are here to help. While COVID-19 has effected our markets globally, we have been in business for fifty years and have seen our share of market ups and downs. As always, it is our commitment to provide a seamless home buying or selling experience and we are able to do that while keeping our community’s safety a priority. Connect with a Smith agent today, click here.
Please watch as CEO of Smith & Associates Real Estate, Bob Glaser, discusses the Real Estate Market as it relates to COVID-19.
Smith & Associates Real Estate has been an integral part of the Tampa Bay community for over 50 years. We have provided strategic real estate services through market booms and busts and will continue to provide you with relevant real-time real estate market information.
We are experiencing an unprecedented event in modern history, a global pandemic, COVID-19. While we cannot predict exactly how the virus will spread or the markets will respond, we can promise that our agents with years of experience, will continue their timeless commitment to provide timely facts and analysis on our local market. Because we are in constant communications with our global partners we expect that the United States and Florida will soon be subjected to much more restrictive social distancing regulations.
However, now is definitely not the time to panic. The real estate market is far less emotional than the financial markets. Everyone needs someplace to live, and Florida is still an extremely attractive place to live, work and play.
Many people who are considering buying now may be swayed by other benefits of homeownership: control and certainty. Real estate offers people stable monthly payments and a home that makes them feel safe, comfortable, and happy. Further, inventory is still tight in Tampa Bay and historically low-interest rates mean a buyer can secure best value. People will continue to invest money into tangible assets. Throughout the next few weeks, we will continue to provide timely real estate updates.
We understand the safety of our agents and clients is a top priority. Technology allows us to take a virtual tour of a listing and provide online concierge service with a real estate expert. To assist sellers and buyers, we have secured the best virtual experiences on our listings and providing individual showings on request. Our agents will remain available, providing online and video consultations, live streaming property tours, and sharing updates on social media. We continue to monitor and adhere to the guidelines set forth by our local, state and national governments, as well as leading real estate industry associations.
It has been an honor to live and work in Tampa Bay for my entire adult life. I know how strong, supportive, and resilient we are as a community. I am as confident in Tampa Bay’s real estate market as it was two weeks ago before we fully understood the seriousness of COVID-19.
While events that bring us together have shut down, all 285 of our agents are just a phone call away and are equipped to offer sound advice and assurances.
President / CEO
The Boutique Firm Recorded $1.5 Billion in Sales Predict a Bullish Real Estate Market for Tampa Bay in 2020
Tampa Bay’s largest independently-owned real estate brokerage firm, Smith & Associates Real Estate, celebrates another record-breaking sales year with $1.5 billion in sales volume, an increase of 22% from the previous year. The company has been serving Tampa Bay’s real estate market for over fifty years and recognized associate accomplishments with a party at the Armature Works in Downtown Tampa. With their Developer Services team representing ten projects in Tampa Bay that have completion dates set between 2020 and 2023, Smith feels confident that the Tampa Bay real estate market will be on fire in 2020.
Established in 1969, Smith & Associates Real Estate has grown to be one of the most influential companies in the Bay, with revenues exceeding $1.5 billion in 2019. The firm represents high-profile residential and commercial developments. It is the exclusive listing agent for almost all of Tampa Bay’s high-profile towers, including The Edition, Riverwalk Place, Hyde Park House, Elevé 61, The Sanctuary, Saltaire, and Altura. Smith & Associates Real Estate is the number one luxury brokerage firm of $1M + residences in both Hillsborough and Pinellas Counties.
President and CEO, Bob Glaser, says his company’s focus on investing in employees, giving back to the community, and fostering strategic partnerships will continue to inform the company’s growth strategy. “As Tampa Bay has grown, so have we. We’ve had tremendous success and are bringing over 2 billion dollars of inventory to the local market in the upcoming years, representing developments in downtown Tampa and St. Pete. Yet, we anticipate that marketplace demand will outpace available inventory.”
According to the real estate website Zillow, Tampa home values went up 3.9% in 2019 and Zillow forecasts they will rise an additional 4% in 2020. Tampa also ranks 4th among the nation’s The most popular investment markets, according to Realtor.com® .
While the Smith team celebrated their record-breaking year and the associates with exceptional sales, the organization also presented their most coveted honor, The Mary Smith Conover Citizen Award, which honors the spry 93-year-old founder of Smith & Associates Real Estate. The award is a nod towards the company’s founder and keeps the philanthropic intention at the forefront for every associate. This year’s winner was Becky Slocum clocked nearly 1,800 volunteer hours with The American Red Cross and is a member of the Disaster Action Team, working on-call shifts throughout the night from 6 PM – 6 AM.
Becky Slocum (Award Recipient), Bob Glaser (President and CEO), and Mary Smith Conover (Founder) at Kickoff Celebration at Armature Works
City of St. Petersburg Buys Science Center
The Science Center of Pinellas sold for $3.15 million to the City of St. Petersburg. The sale was recorded as the second highest commercial sale in the 33710 zip code in the last five years. Located at 7701 22nd Avenue North, the City of St. Petersburg has plans to extend its water treatment plant on the property.
CareerSource Pinellas’ Board of Directors approved Smith & Associates Real Estate’s provider bid paving the way for them to sell The Science Center on the competitive market.
“It was a pleasure to provide real estate services to CareerSource Pinellas and The City of St. Petersburg. The St. Petersburg real estate market is strong and I was confident that we would sell this beautiful commercial property in a timely manner,” said Angela D. Grannan, Smith & Associates agent representing the sale.
Formally owned by CareerSource Pinellas, the Science Center of Pinellas was used for job training, STEM field trips, and helping people find jobs in the trade industry. CareerSource continues to offer skills training and seminars at their other locations throughout Pinellas County.
Angela D. Grannan (left) at closing.
Click here to learn more about Smith & Associates Real Estate’s Commercial Division.