Everyone is looking for a way to make more money. Some people play the stock market, others buy and sell items of value. Over the years, real estate investment has proven to be an excellent investment, especially if you do your homework and are very patient. There are opportunities for you to lose your shorts, too, but if well researched, real estate can be exceptionally profitable. You can purchase property to live in and hope that it appreciates over time; you can buy a home to fix up and flip, or you can buy a place to rent out for additional income. Determining what kind of property you want and its intended use will help you make some very important decisions, ones that can make or break your investment. We reached out to a property management group in Oklahoma (http://www.energypmokc.com) for some feedback and this is what we came up with.
While everyone would love to own something that appreciates by the thousands in a short period of time, that scenario just doesn’t happen that often. If you were lucky enough to get in on the ground floor of some property in New York or California and you held on to it, you have probably made a pretty penny over the years. Homes in Southern California that were purchased in the 1970’s and 1980’s for under $100,000 are well over a million dollars today, but in most cases, it took thirty years to appreciate to such a level. Additionally, it is unusual for a property’s monetary worth to grow so much, but if you know where and when to buy, there is ample opportunity to make some money.
Once you know what type of property you want and its potential usage, you need to narrow down the most important aspect of any home purchase: location, location, location. An untapped locale that is brimming with potential is Oklahoma. While Oklahoma may not be the first state that pops into your head when you think of “investment property”, that is precisely one of the reasons it is the perfect choice! Oklahoma City ranked in the top fifty cities in the United States based on livability, economy, and affordability. If you’re looking for a long term home for you and your family, Oklahoma City offers great schools, and while the housing market lags behind the national average, the number of quality jobs is substantial. An average home in Oklahoma City will set you back about $150,000; substantially less than the national housing average. This is advantageous if you are looking to make this area your home; the possibility for growth long term is great. People in Oklahoma spend an average of 7 percent of their income on housing where the average for the rest of the country is 15 percent, making the affordability factor for young families very appealing. Over the past nine years, homes in Oklahoma City have appreciated each year, building a slow and steady equity for their owners. While it may not be a “get rich quick” deal, the return on investment is definitely there.
Oklahoma City also has seen an influx in its economy and job market, making an investment in real estate a solid one. With the recent election of a Republican president, the oil industry has seen a resurgence which equates to more homes sold in the area. Unemployment in Oklahoma City is almost two full points lower than the national average and there is expected job growth in the city, as well. With homes appreciating about 2.5 percent per year, it’s a slow profit, but it’s a profit, especially if you are living in it and earning the equity and are in no rush to cash in. These factors bode well for someone looking to purchase a home in Oklahoma City and many of its surrounding cities.
If the real estate market in Oklahoma appeals to you, but you’re not quite ready to call it home, or, you already live there and are interested in cashing in on the explosive market, purchasing distressed homes and rehabilitating them might be the answer. “Flipping” homes, or finding a home that is under the market and fixing it up for a quick sale has become a big business. It’s not unusual to turn on the TV and find someone rehabbing a home for a substantial profit, but be forewarned; it is not as easy as it looks on TV. If you purchase a distressed property, even for a paltry sum, the money you may have to invest to make it livable may be more than its overall worth. There are always delays and surprises that arise as well; a successful flip takes time, money, reliable workmen, and knowing the market. While a flip can reward you with a nice lump sum at the end of the process, it is not always easy getting there, and the potential to lose money is always a possibility.
Many of these distressed homes are from foreclosures, where the mortgage owner couldn’t or wouldn’t pay the mortgage, and the home gets sold back to the bank. The bank doesn’t want it, but they don’t want to lose money on the home, either, so they look to sell them, often to investors. Many homes go to auction and the bids can start low and jump up, depending upon the popularity of the property. The median price for a foreclosed home in Oklahoma City runs around $58,000, so the profit potential is great if done right.
You could also purchase a home and rent it out. While it is not a quick buck like flipping a house, you can build equity in a house, have someone else pay the mortgage and maybe even earn some additional funds each month. While there are many benefits to buying property and renting it out, there are also some drawbacks: if you don’t live in the same town, you will need a property management team to ensure the house is well cared for, and that will cost you money each month. Additionally, if you don’t have a property management team and you are the landlord, you risk renting to someone who may not care for your home. You are also responsible for any expenses associated with the house while the tenants live there, and it can add up quickly.
If you are not comfortable flipping a home or buying a rental property because you don’t have the available funds, you can try crowdfunding. Crowdfunding involves several people getting together and each investing a smaller amount for less risk. The rewards are a lot less, too, but it is a way to make an investment with less liability.
Oklahoma offers excellent opportunities for real estate investments based on the economy, availability of inventory, the up-and-coming job market, and affordability. Speak to a reputable real estate agent to start your search!