Five Steps to Understand Successful LBI Real Estate Investment
Successful LBI Real Estate InvestmentThe LBI Real Estate Market
The LBI real estate market offers some very interesting and lucrative investment opportunities. These investments include building a new home on Long Beach Island, which often result in an immediate equity appreciation, buying an investment property and generating a stabilized rate of return via summer rentals, or buying a home, performing basic renovations, renting and selling as the market rises. While the last of these options involves the most risk, the first two can provide a desirable rate of return and a Successful LBI Real Estate Investment.
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Successful LBI Real Estate Investment
There are five elements that help to constitute a safe real estate investment on Long Beach Island. They are:
- Establishing a realistic goal
- Assembling a team to help manage your investment
- Understanding the costs associated with owning a home on Long Beach Island
- Selecting the right location
- Selecting a property that can yield the desired return
Perhaps the first item on my list is the most important. While there are many opportunities to generate a positive return in the LBI real estate market, it will be some time, if ever, that we see the outrageous growth witnessed leading up to 2006 and the height of the nationwide market. With work, double-digit annual increases are not impossible. Assembling the right team to help manage investment is the next crucial step to a Successful LBI Real Estate Investment. Most investments will involve some degree of summer rentals on Long Beach Island, so it is important to have a system in place to deal with the summer tenants. For most people, this will involve a real estate agency managing the rentals however this service comes at a cost. Some homeowners, to avoid this cost, will rent on their own with sites such as Homeaway.com. This can result in a higher net proceeding, however a home owner must be willing to service the rental themselves or have a system in place to take care of has needs. Understandimg the costs associated with owning a home on Long Beach Island is of course a critical component. Long Beach Island has additional expenses, for example flood insurance, that may not be planned for by some buyers. The good news is, property taxes tend to be lower on Long Beach Island so having a complete picture expensive important. Choosing the right location, second only to establishing a realistic goal, is the next most important element. Generally speaking, Oceanside, ocean block, and oceanfront homes will appreciate the fastest and be the easiest to sell in the market. This is true in both the sale and rental market on Long Beach Island. There are higher costs associated with owning a home on the Oceanside areas of LBI, so this must be taken into account when budgeting for your investment. Lastly, choosing a property that can yield the desired return may take some time but it should pay off. It is best to look for a home on a street of new or renovated homes and complete a project yourself.
Investing in the Long Beach Island Real Estate Market
Like any investment, buying a home on LBI carries some level of risk. Depending on the nature of investment, these risks can be minimized. In my opinion, the safest of all investments in the LBI real estate market is to purchase a teardown or vacant land and construct a new home. This will typically result in a finished product valued at approximately 30% more than the cost of construction. To put it in more rational terms, if a buyer were to spend $1 million between the purchase of the land and the building of a home, that finished home would be worth approximately $1,300,000 in the LBI real estate market. For more information about home sales on Long Beach Island or Successful LBI Real Estate Investment contact me and I will respond right away.
By : Nathan Colmer | The Van Dyk Group
Cell: 609-290-4293 | Office: 800-222-0131 | ncolmer@vandykgroup.com
www.BuyLBI.com
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