Long Beach Island Real Estate Investment
Most investment advisers would agree that real estate is one of the best long-term investment you can make. While of course it is subject to ups and downs in the market like any investment, a long-term hold on a rental property in the LBI real estate market has the potential to be one of the best investments in your portfolio. This is especially true for younger buyers who can take advantage of the long market hold to capitalize on that investment. Therefore, understanding why young buyers should invest in the LBI real estate market can help to understand the overall dynamics of Long Beach Island real estate.
Why Young Buyers Should Invest in the LBI Real Estate Market
Let me begin by saying I am not an investment advisor and any information taken from this article should certainly be discussed with your accountant, financial planner, etc. I am going to share some of my personal experiences and planning for real estate investment on Long Beach Island. If a young buyer, someone in their 20s especially, were to make an investment on Long Beach Island strictly for rental purposes, long-term it could play out to their advantage. Let’s take a lower cost market home and use it as an example.
- Purchase price: $600,000
- Ownership expenses: $15,000
- Mortgage costs and holding costs: $40,000
If a property such as this were to be rented out for the entire summer season and ideally some off-season rentals, it is more than likely you can gross between $55,000 and $60,000 in the right property. While a break-even scenario may not sound like the best investment, it is important to remember that the property should come close to costing you nothing per year, apart from annual upkeep, as rentals paid off your mortgage. If you can take a little extra profit, let’s assume that $5,000 overage, and apply that towards the monthly mortgage, the home would be paid off even faster. Looking forward in the future 25 or 30 years when the house is fully paid off, you own on an asset free and clear that is generating a net profit of around $40,000 as your entire out-of-pocket cost would be limited to your down payment. This of course does not account for annual increases, inflation, etc. Even if you were out of pocket a few thousand dollars each year, the long term rental potential as well as the natural market appreciation would make your LBI house one of the best investments in theory.
Buying Long Beach Island Real Estate Investment Properties
As I mentioned above, it is important to discuss any investment with the proper licensed individuals such as an accountant or a financial planner. I have great confidence in real estate as an investment on Long Beach Island and have personally purchased several properties for this intent. For more information about Long Beach Island real estate investment, please do not hesitate to contact me.
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | firstname.lastname@example.org
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