How Real Estate Investment Can Improve Your Financial Future

Buying a home is a major investment for any family. It is also a great tool you can use to help give your family a stable financial future. You can start the journey into real estate investment by exploring the options available to you in the Dayton, Ohio area. Are you ready to change your future? We are!

Why Investing in Real Estate Is a Good Idea

Investing in real estate has several benefits. It can be a great source of additional cash flow, give you tax benefits, and help you diversify your portfolio.

Here are some of the advantages offered by investing in real estate:

  • Cash Flow: If you have an investment property, it can be a good source of income, especially if you rent the property. Once you have made your mortgage payment and covered operating expenses, any money left over is your cash flow.
  • Appreciation: In stable market times, real estate values tend to increase over time. By choosing the right property, you can earn a profit when you decide to sell it.
  • Tax Advantages: Depending on your tax situation, your real estate investments may help reduce your overall tax burden. You may be able to deduct the costs of managing and owning a property.
  • Diversification: A diverse investment portfolio helps reduce your financial risk. Real estate tends to be more stable than other types of investments.

With so many tangible benefits, it is easy to see why investing in real estate can be a smart financial choice.

How to Get Started with an Investment Property

Before you put your hard-earned savings into an investment property in Ohio, you need to know how to get started. You also need to make sure this is a project you are ready for.

1. Are You Prepared to Be a Landlord?

Most real estate investors start small by being a landlord. A landlord must take on all the roles of a property manager. This usually includes any necessary property repairs and general maintenance. While you can always hire someone to do these tasks for you, that will cut your potential profits.

If you do not think of yourself as a handy person or someone willing to work through difficult problems, you may not make it as a landlord.

2. Work on Paying Down Your Debt 

An important part of investing in real estate is having a solid cash flow. Before you can get to that step, you need to focus on paying down any debts you may have. This includes student loans, medical bills, and car payments.

3. Save For a Down Payment

Taking out a mortgage on a house you plan to live in is easier than getting a mortgage for an investment property. These types of loans have stricter requirements. You will typically need at least a 20% down payment.

4. Choose the Right Location for Investment

One of the most important steps in purchasing real estate is choosing the right location. This is especially true when you are investing. Check local trends to see if a certain neighborhood is on the decline or on the rise. You should also consider local school districts if you are buying a family home. Bellbrook and Centerville schools are two local well-performing districts that are popular choices for new home construction.

A chart showing the testing rank of Bellbrook-Sugarcreek Local Schools over time.


5. Determine Your Margins

Real estate experts recommend individual investors should aim for a 10% return on their real estate investments. This should be your goal after calculating mortgage costs, insurance, maintenance, and other expenses.

6. Avoid Becoming a House Flipper

First-time real estate investors should avoid buying a rundown property with the aim to flip it. This is because the costs of necessary repairs may outpace any cash buffer you have. Plan to invest first in a quality property that only needs minor repairs.

7. Be Realistic

If you start investing in real estate thinking that it will be an easy paycheck, you may end up being disappointed. Real estate takes hard work and time. However, if you make smart investment choices, you should start to see a profit over time.

With these considerations in mind, you can weigh your personal pros and cons and decide if investing in real estate is the right choice for you.

Types of Real Estate Investment Properties in Dayton

The Dayton, Ohio area is a great place to live. Many cities in the Greater Dayton area have lower-than-average costs of living and affordable housing pricing. This is what makes Dayton an ideal location for real estate investing.

A screenshot of a map showing the average housing costs in the Dayton Metro area.

Here are the most common types of housing in the Dayton area:

  • Single Family Homes: This type of real estate is likely to be the simplest to deal with, especially for a first investment. You can easily search for homes for sale online.
  • Condominium: Condos usually come with an HOA. This usually includes a monthly fee. However, some maintenance and upkeep may be included in the fees.
  • Multiplex: This type of housing— think a duplex or triplex— is popular in the Dayton area. It gives you the experience of managing multiple tenants without feeling overwhelmed by too many responsibilities.
  • Apartment: You may be able to invest in single apartments before upsizing to complete apartment buildings.
  • New construction: You can always start with a blank slate and choose new construction on a land lot. You can choose which features you think will encourage renters in your area.

The Dayton area is a diverse community with a wide range of real estate investment opportunities and locations.

Become a Real Estate Investing Pro with These Tips

Now that you know what it takes to become a real estate investor, do you think you are ready? With a solid down payment, choosing the right location, and keeping your costs to a minimum, you can be well on your way to financial success.

If you are ready to start your real estate investment adventure, Oberer Homes can help you find the perfect property.

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