When it comes to investing in real estate, people often seek passive income as a way to ensure long-term financial stability. However, it is important to consider multiple factors before making any investments in this area. One of the most important considerations is location. Investing in real estate in a prime location can yield significant returns while investing in a less desirable location can result in financial losses.
To identify the best locations to invest in real estate in 2023, investors should consider factors such as population growth, job growth, and development plans for the area. Cities with a growing population and strong job market tend to have a higher demand for housing, making them attractive options for real estate investment.
Additionally, areas with planned development projects, such as new transportation infrastructure or commercial developments, can also be promising investment locations.
While the location is an important consideration, it is not the only factor to consider when investing in real estate. Investors should also consider the condition of the property, potential rental income, and the local real estate market trends. Conducting thorough research and working with a knowledgeable real estate professional can help investors make informed decisions and maximize their return on investment.
Things to Analyze before Buying First Rental Real Estate
Before everything, it is crucial to analyze the overall real estate market. You need to get an idea of how much the properties cost. Of course, there are many things that influence the price. But, you must check out all of them and compare the prices with the budget that you are willing to invest.
Apart from that, the value matters a lot if you want to be sure to establish a profit. You also need to check out the average rent price in a specific location. It is not a point to purchase real estate if you won’t manage to get back that money from renting after 15 or 20 years. That can only pay out if you, after a certain period, plan to move to a specific apartment or house. In that case, you will have someone who will pay the bills instead of you, get a certain amount of money and a new living place without any debts. But, is that really a passive income that pays off?
Real estate does not have the same value in all parts of the USA. On the other hand, in some states, there are many reasons why investing in rental real estate is a good choice. One of the states that we suggest you check out is Michigan.
In this article, we would want to highlight all the good reasons to invest in rental real estate in Michigan. That way, you will determine on your own whether this is going to be a good decision or not. Let’s go!
The Real Estate Is Affordable
The word “affordable” does not have the same meaning for all people. However, in this case, we are comparing the price of real estate in Michigan with the value of the real estate in other parts of the US. Generally speaking, the price is below the national average. While we are writing this article, the average price of homes is a bit more than 80 thousand dollars.
Some of you may say “there is no reason to save when investing”. We completely agree with that statement. But, we believe you are a beginner. Inexperienced investors should not strive to invest a lot immediately after they start their journey. They should start with small steps and low prices of real estate in Michigan is a great way to do that.
It Is a Touristic State
If you have never been to Michigan, then we have to tell you that the weather in all four seasons is way different. You can expect to experience very very cold winters and very very hot summers. That means you can’t expect older people and those that retired are going to rent an apartment there. On the other hand, this is heaven for younger people that want to have amazing winters and summers.
All the people that want to enjoy the summer charm of Michigan as well as winter sports from November to March will want to rent an apartment here. Doesn’t that seem like a good reason to purchase real estate that you can later rent to tourists? You will have the opportunity to make a profit for almost 100% during 7 out of 12 months during the year. The remaining 5 months won’t be unprofitable either.
This State Will Grow
We do not want to represent Michigan (especially Detroit) as a perfect place for living. This state has its own problems. That especially counts when we talk about water quality. On the other hand, the criminal rate isn’t low either. But, have you heard about the new development programs dedicated to this state? If this is not state for you, then you can always look for house or apartment in some other state. There are for example apartment for rent in Irving which could be interesting for you.
New companies are slowly investing in this state. Because of that, more and more people will get new jobs with better salaries. That automatically means the average salary will grow even more among residents of Michigan. A better standard ensures the living place becomes better. The criminal rate will certainly go down while all the drawbacks of the state can be fixed.
Also, with the appearance of a new multinational company, a lot of people from different parts of the USA and the world will have to come here to work. Where will they live? If renting an apartment to tourists only seems like a risky move, then you can rent your apartment to some of the people that come to live here. You will have a fixed income during the month and peace of mind is ensured.
Low Personal Income Taxes
As a real estate owner, you will probably get headaches from property taxes. Without any doubt, they are one of the highest in the entire United States of America. Yet, that’s not something that should scare you at all. Some other taxes are extremely low and one of them worth mentioning is personal income taxes. Also, we have to highlight that inheritance and estate taxes do not exist.
Living under those conditions is amazing. That ensures that the salaries can be higher. People love places where personal income taxes are low. That especially counts when we talk about business owners. All these conditions can attract people to come here, start a business or simply look for a job. You can use that opportunity to rent an apartment. If Michigan continue to grow in the same way, then the demand for rent is going to be higher than ever. That allows you to boost the price of rent a bit more and ensure better passive income.
Final Thought: How to Find the Best Real Estate for Investment?
The real estate selection in Michigan is amazing. You will truly have a lot of options in front of you. But, who says that they are all good? Some sellers know the way to hide all the gaps that a certain real estate has. Because of that, we recommend you hire real estate agents in Michigan and make things easier. Experts can help you make one of the biggest investments. Isn’t that great?