Real estate can be a very a prosperous endeavor for the savvy investor, and National Realty Investment Advisors LLC indicates that people can increase their return by delving into the world of 100% new construction investments especially. This firm specializes in helping people who want to invest in the construction of new realty in the Philadelphia area, which is quickly becoming a real estate powerhouse. It is not the only area that harbors massive potential, but Philadelphia has incredible advantages.
A real estate expert will know what steps to take and what path to follow when it comes to creating a real property investment. Amateur real estate investors can also find themselves gaining a favorable return as long as they adhere to the following guidelines:
- The key to real estate is location, location, location. Investors who are looking at constructing new properties should inspect numerous properties to find the best lot. They not only want to look at the plot of land they wish to purchase, but also the surrounding neighborhood. Does the area have nice schools? Is the property near public transportation? What is the demographic like? What is the price vs value ratio?
- When buying the land, investors must take out title insurance. This protects both the owners and the lenders against any risk to the ownership or debt free nature of the property. This damage or loss can be experienced due to liens, encumbrances, or defects in the property’s title. Legal complications can be a real estate investor’s worst nightmare; title insurance guarantees your deed /title is free and clear – so it’s required.
- A land survey is another vital component in the real estate construction investment process. Sometimes, investors will not need a survey done since it may have already been completed not too long ago. Surveying is not always necessary, but it is often encouraged for investors. The survey and deed analysis of the surveyor will guarantee the plot size for building plans. The only downfall of this option is that it can be costly depending on the area. Investors are advised to consult with a professional surveyor to chart the boundaries and assess the land.
Precise required architectural plans are next. A licensed architect will now confirm, draw, and specify what you can really build. From these plans a licensed appraiser can value the building to be constructed “Subject to” the building specifications. This value is critical to knowing what the deal sells for. It also shows you how much less it has to be built for in bidding to Builders. Also use the plans and appraisal to quote out what various Property Managers think the rent will be.
Use the plans precisely specified to quote to your builders in competitive bids. Make sure all materials are clearly outlined by the architect. Quote multiple reputable licensed contractors after checking carefully their references.
- After the complex has been constructed, there is still more work to be done. Hiring a property manager may seem costly at first, but it really is required for the new investor. When they have someone else managing their property, they save time and money on all the many details of tenant recruitment, collections, and management your PM will do for you. It’s always worth it.
- Nonetheless, double check your Property Mangers recruiting work. , If a property owner picks the wrong tenants, you can lose money. They should carefully credit screen all prospective tenants that they plan to rent to so that they can determine if they have any negative incidents in their history. Tenants with bad credit or a history of nonpayment are best to avoid. Always require current pay stubs, proofs of employment, and do a last land lord verification of good standing.
National Realty Investment Advisors Highlights Philadelphia’s Real Estate Market Drivers
“The Philadelphia real estate market has shown massive steady appreciation over the past few years, and it is ongoing,” indicates Art Scutaro Senior Project Manager from National Realty Investment Advisors LLC. “There are many factors that contribute to the thriving real estate market in the city, which is why we encourage investors to seize upon the limited present opportunities we make available from time to time. One of the core ways to create value in real estate is to look at market drivers. Below are some of the more notable drivers in Philadelphia” says Scutaro:
- Philadelphia is home to a 10-year property tax abatement. This means that people do not have to pay property taxes for up to 10 years.
- Philadelphia is home to numerous prestigious colleges and universities. This includes Drexel University, Temple University, La Salle University, Hanneman Teaching Hospital, Drexel Medical School, Temple Hospital, and the University of Pennsylvania.
- Center City Philadelphia is a resilient realty market. The year-over-year appreciation in small home prices is 3 to 4 percent.
- Philadelphia features one of the lowest existing vacancy rates on rented properties in the entire country, which is less than 4 percent on Town Homes.
- There is a massive price differential between Pennsylvania homes and the neighboring cities of Washington, D.C. and New York City. Plenty of residents from these two metropolises are consistently migrating to the Philadelphia area because they see that they can get the same living arrangements for significantly cheaper prices.
- People who still want to enjoy the life of Washington, D.C. and New York City can take the High Speed Amtrak Acella Train from Philadelphia. The luxury ride to NYC or D.C. takes roughly an hour and costs much less than the property taxes and monthly fees to live in those cities.
The mega demographic trend of “gentrification” of older poorer citizens leaving the Cities to move in with family and up and coming young professionals as well as monies “empty nesters” returning from the suburbs is well entrenched worldwide. There are countless top qualities of rental homes and sometimes an up and coming neighborhood is one of them. This mega demographic movement means the better Cities will have lots renters and buyer occupants for years and years to come creating appreciating rents and values for owner investor landlords.