The millennial generation is starting to venture into the real estate market. With many opting for the affordability of the suburbs over the expense of urban environments, a new trend seems to be emerging: Real Estate Investment for Millennials.
Buying Your Home in Phoenix
Phoenix area millennials are running into the same problems as other first-time buyers: A low supply of affordable housing close to the city. While there is the option to rent, remaining a perpetual tenant of a high-cost property can lose its appeal as members of this group marry and want to start families. Buying in suburban areas may offer homes at lower price points, quality schools, and provide an opportunity for home-buyers to save money and build equity.
Those who already own a home or are content renting, may finally be in a position of having enough credit history, savings, or property equity to think about buying real estate as an investment. There can be benefits to buying property in a healthy market, such as being able to flip or lease it for a profit. However, it’s essential to carefully evaluate your financial situation before moving forward with an investment purchase.
Phoenix is a Good Flipping Market
According to a recent report by Realtor.com, in “raw numbers, there are more home flips in Phoenix than anywhere else in the nation.” This means that millennials and anyone else looking to get into flipping in Maricopa County are going to have plenty of competition. You must have your finances in order, and be ready to jump on the right opportunities as soon as possible. Your realtor can help you assess the purchase (i.e., fair price, condition of the home, area, future value, etc.) and get a realistic idea of what you will have to pay to recoup a decent profit from the purchase. Your agent can help you find reliable contractors and determine if you are being offered a reasonable price for their work.
The 1% Rule
For rentals, the 1% rule means that unless you can rent the property for a minimum of 1% of what it cost to purchase and make any necessary repairs or additions, it’s not worth the investment. To perform thorough due diligence, you need to consult with an experienced Arizona real estate agent beforehand to help you identify the right property and assess its potential rental value. Additionally, your real estate agent can assist you in calculating the expected repair costs for your project.
Arizona real estate can be a lucrative venture, but it is imperative that you get guidance from a licensed Arizona realtor and also have the trained eye of an attorney to safeguard your legal interests at every stage. Attorney Laura B. Bramnick is an experienced Arizona real estate attorney who has the expertise to protect your interests before, during, and after your real estate transaction. If you are seeking an exceptional, client-driven real estate lawyer in Scottsdale, Phoenix, Sedona and throughout the state of Arizona, contact Laura B. Bramnick to schedule your consultation.