Real Estate Investment Basics: Why It’s Good and How it Works

Investment trends come and go, but investing in property will be a steady investment option for centuries to come. Investing in real estate can come in many forms, such as purchasing a home for yourself, flipping a home, turning it into a long-term rental, or using it as a vacation getaway.


If you do your research, your purchase will prove to be fruitful. Real estate can generate consistent passive income, appreciate in value with the market, and rebound after the market falls. It can also serve as a solid introduction to building wealth. Coastal Premier Properties is here to help you on your real estate journey. Here’s some information and advice on how investment can work in your favor:


Vacation Rentals


If you have a home you love and are not looking to sell, or if you’re hesitant to tackle long-term rentals, then short-term rentals (i.e., vacation rentals) are ideal for starting your real estate investment portfolio. Short-term rentals allow you the flexibility to rent to a variety of tenants. You get to choose the timing/seasons to rent, and you can use them for your personal use. In the right market, you’ll also likely see higher returns than with long-term rentals.


With short-term rentals, it’s all about location, location, location. Places like Miramar Beach, FL offer so many excellent options in neighborhoods like the Maravilla Resort, the Frangista Beach community, and the Mainsail Community. Once you find the prime location, you can then advertise all the popular locations that are nearby, which creates more of a buzz for potential renters.


In it for the Long Haul


Short-term rentals may prove to be more lucrative if you choose the right place and the economy is such that people invest in travel. However, they’re not as consistent as long-term rentals. With long-term renters:


  • You don’t have to choose an expensive property in a vacation hotspot since your renters won’t be vacationers.
  • You’ll have longer leases, guaranteeing you a steady income for renting it out.
  • You can move some of the maintenance responsibilities to the tenant, saving you money in repair costs. For example, you can add a clause in your long-term lease stating that while you’re responsible for large repairs (like a broken pipe), renters are responsible for smaller ones (like window glass broken by your tenant and light bulb replacement).
  • You’ll have fewer management fees if you use a management company.
  • You’ll have little to no utility expenses, since these will be the responsibility of your renter.


Like short-term rentals, you’ll likely see a better return on your investment if you find a prime location where rentals are needed and where you can find top-notch tenants who can be trusted to care about the space.


Movin’ on Up


If you’re looking for a home but aren’t ready to be in your forever home just yet, then you have a few options when it comes to investing:


  • Buy low in a buyer’s market and sell high in a seller’s market. This is all about timing and may require you to wait out dips in the real estate market.
  • Buy a home that needs some TLC, update the home, and sell for the upgraded price. This may require some DIY and requires planning so that your costs stay low.
  • Live in the home you choose, and when it’s ready to sell, aim for some gains. This option is more about luck than planning, but if you need to move while it happens to be a seller’s market, you can make some serious gains.


As a tip, avoid taxes on whatever gains you do make by planning to claim the home as your principal residence for two years.


If you’re looking to build wealth and diversify your income and investment portfolio, then investing in real estate is a great start. It’s not the only investment vehicle, but it’s the most reliable, steady, and valued. As you build your real estate assets, you’re not required to stay in your lane. Choose one real estate investment to begin with to see how it works for you. Over time, you can invest in one type or mix it up with multiple types of real estate.


Are you looking for a reputable real estate professional to assist you in buying or selling a home? Contact Coastal Premier Properties today! (850) 502-6300

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