What’s a 1031 exchange?
You may have heard this term if you’ve done research on real estate investment. It may sound complicated, but it’s actually pretty straightforward.
A 1031 exchange is exchanging one business asset for another–in this case, swapping one property for one or more properties. Many people like this option because it provides advantages such as tax benefits. However, this can become a complicated process. We are experienced and knowledgeable about 1031 exchanges and can offer guidance to make the procedure as smooth as possible.
Contact us today for information and any questions you may have about investing in real estate and a 1031 exchange.
7 tips for investing in real estate
- Consider the amenities.
Not only current, but projected amenities are an important factor for potential tenants. What is the neighborhood like? What school district is in the property in? What type of employment opportunities are nearby? Thes are the factors your potential tenants will care about, so consider these types of questions when looking for a property to invest in
- Be aware of property taxes.
You can’t escape it, but you can plan for it! Talk with homeowners in the neighborhood to find out what the property taxes are like in that area. Also, try visiting the town’s assessment office. Do some research beforehand to avoid the majority of your investment going towards taxes.
- Research crime rates.
Thanks to the internet, most information is only a click away. Visit the police department’s website or go into the public library to find recent statistics on crime rates including vandalism, burglaries and other serious and petty crimes. Always keep in mind the wants of your potential tenants. If you wouldn’t feel safe in that community, why would they?
- Consider a 1031 exchange.
Cash isn’t the only way to start a real estate investment. Other options like a 1031 exchange might be a more money conscious decision, offering you more flexibility with your finances. (Read more about a 1031 exchange at the top of this page).
- Be aware of high vacancy rates.
An unusually large number of vacancies could be a signal of a problem. There may be something drawing tenants away from the neighborhood, or it could just be a seasonal drop.
- Evaluate rent rates.
Do some research to figure out what current average rent rates are in your area. Factor this average rate into projected property tax increases to determine if this property will be a profitable and affordable investment.
- Factor in natural disaster vulnerability.
You should always thoroughly inspect the area surrounding your investment property. For example, if it’s a hurricane or flood prone location, you will need more insurance coverage which will cost more. Also, consider how this will affect the number of vacancies the property may hold.
Investing in Houston Culture
If you are looking to invest in real estate, Houston is the perfect market. Not only is Houston real estate booming, but it’s a great place to live, work, and play. Your tenants will love calling Houston home.