Generally, if you’re looking to buy in a major metropolitan area, you’ll need to consider a number of factors which includes employment market, cost of living and sale prices of comparable homes, median household incomes and the area’s overall economic growth. If you’re thinking of investing in a luxury vacation rental, you’ll also need to think about the kind of traffic the area sees during peak periods and year-round. As compared to countries like India or China where the property prices have skyrocketed enough, America on the other hand provides affordable real estate investment opportunities to the point that buying a home in US is cheaper compared to buying a home in China or India, which is why there is a rush of global investors in the US. Before you decide whether you should invest in small homes or luxury real estate properties, read the following tips which may help you:
ADVANTAGES OF SMALL HOUSES
You can buy and rent out small homes for positive and stable income as opposed to investing in luxury minion or apartment and having to wait for a longer period of time before it is sold. Generally, a small property has a faster buy and sale time period. Luxury properties are already bought at a higher price and to sell the same at a higher profit margin will take considerable time and thus one needs to approach the hold and sale plan.
ADVANTAGES OF LUXURY PROPERTIES
Just like small homes, the luxury property can be used for rental income and when it comes to rental income, luxury properties offer more profitable income as opposed to the rental income made via renting out a small house.
If you’re investing in a property that comes with 7 figures plus price tag, it’s important to be sure that there’s a demand for what you’re trying to sell. Luxury properties are easier to buy if you have the finance but are harder to sell at bigger profit margins as opposed to buying and selling a single family home. In this situation, you may be able to get a hard money loan to finance the flip. Hard money loans are short-term loans that are designed to be paid back in just a few months and they’re usually easier to get approved for than traditional bank loans. This type of loan usually carries higher fees and interest rates. But you could pay it back fairly quickly without having to liquidate any of your own assets.
You can find a luxury home that’s a bargain, renovate it and put it back on the market. If the home sells relatively quickly at the price you listed, you could have a decent amount of cash in your pocket in a short period of time. If you want something that’s going to generate income on a more consistent basis, however, you may want to look at investing in a vacation home that you could rent out or an apartment building.
Increased demand in American real estate markets offers prime opportunities for foreign investors and we can guide you for your investment venture in America. Contact us today for more details.