2023 Central Georgia's Real Estate Connection

Factors to Consider Before
Investing in Real Estate
The appreciation of real
estate over time has long
made owning a home or
an investment property
a sound financial strategy.
Prospective home buyers spend
considerable time looking for
a property they’re hoping to
call home. Various factors,
including property taxes and the
reputation of local schools, may
be considered as homeowners
decide where to look for a new
home. That vetting process is
equally important, albeit slightly
different, when buyers are
consider investing in properties
they don’t intend to live in.
Real estate can be a great way to
diversify an investment portfolio
and earn extra income. Before
shopping for an investment
property, novice investors may
want to consider certain factors
to determine if real estate is the
best investment vehicle for them.
RENTAL POTENTIAL
AND THE LOCAL LABOR
FORCE
Location is a significant factor to
consider when investing in real
estate, but recent shifts in how
and where people work could
change the real estate investment
landscape. A 2020 Gartner,
Inc., survey of more than 300
financial executives and leaders
in the finance industry found
that roughly 25 percent will
move at least one out of every
five of their on-site workers to
permanently remote positions in
the years ahead. Economists note
that this shift to remote working
could be among the more lasting
trends to emerge from the
pandemic. Before investing in
real estate, prospective investors
should examine local trends to
see if more and more locals are
working remotely, and whether
or not that’s affecting the market
for rentals.
TO FLIP OR NOT TO FLIP
Flipping properties gained
popularity in the second decade
of this century, but figures from
the property database curator
ATTOM Data Solutions indicates
that returns on investments in
flipped properties declined for
the third straight year in 2020.
Though flipping can still yield
a strong return, investors may
not realize the returns on flipped
properties that they might
have realized as recently as five
years ago. Potential investors
should conduct some research
regarding real estate market
trends, including flipping data
where available, to make the
most informed decision possible.
CONDITION OF THE
PROPERTY
Product shortages were another
trend to emerge during the
pandemic, and disruptions
to the supply chain will not
necessarily go away anytime
soon. In addition, the cost of
various products associated with
home improvements, including
lumber, skyrocketed during
the pandemic. The National
Association of Home Builders
noted that while lumber prices
declined in 2021, the price of
lumber packages quoted to
builders remained high. That
means real estate investors who
invest in properties that will
need work could be forced to
pay a lot to fix these properties.
And ongoing supply chain issues
could extend the time it takes to
renovate a property. Investors
must be able to bear these costs
and lag times to make the most
off their real estate investments.
Investment properties can be a
great way to diversify a portfolio.
Potential investors must consider
a host of factors to determine if
real estate is an investment they
want to make.
Page 8 Central Georgia’s Real Estate Connection 2023