Use Your Dollars to Make Sense
by Andrea O'Neill
Who says you need millions to make a large profit investing in real estate? As newlyweds trying to get life started in sunny South Florida, my husband Chris and I had to make a plan in order to find a home that we could actually afford to buy. Starting small in a two-bedroom townhouse, we planned to stay for at least a few years, but when the market started to skyrocket, the dollars added up to sense. We bought in at $91,000 and sold, by owner, a little less than two years later for $122,000 in about 10 days. That's when we got the bug! I mean, if it was that easy to make $31,000, why not see if we could make more?
With a new baby, moving into a single-family home was the best bet, and we saw the possibilities for a much greater return on our investment. We purchased a home in the heart of Palm Beach Gardens, and after some light renovations and a lot of paint, we were ready to check where we stood on the market. We couldn't believe that in 10 months, our home's value raised from $149,000 to an astounding $255,000!
With that kind of down payment we could buy "the dream home," and upon searching, we found a beautiful five-bedroom, three bath home on a little over an acre with the big pool, basketball court, all much more than what we had expected. It was on the market for $450,000 but needing a quick closing, so we negotiated and definitely got a steal at $380,000. After Hurricanes Frances and Jeanne damaged the house and all of our belongings after we'd only resided there for five months, we continued watching home prices while repairs were being made...and the market never even hiccupped!
So we decided to sell again, and after the home was on the market for only about a month, we finally accepted an offer of $550,000 from a nice family with the time to handle the remainder of the repairs on the house. Knowing what we bought it for in March 2004 and it being January 2005, that's a 69 percent return on our investment!
With $170,000 to buy a new home and furniture to fill it, we had a lot of options. In our market, pre-construction homes were a great investment and a new house has metal hurricane shutters and a tile roof, which were the most important features for me.
Tip: Another option would be to take a portion of your return and invest in a rental property or vacant land if you don't want to manage renters. Vacant land, if you were to search around your area or anywhere in the country, can have a large return on your investment over a five or ten year period with little or no maintenance at all. So, you don't need to have enough extra cash lying around to purchase three or four rental properties and then find time to manage them in order to make money in real estate. Just think creatively and keep your eye on the market! Happy Investing!
800-868-6230
JasonR@ppicash.com
|
