It’s a Buyers’ Market for Real Estate Investors In Rhode Island

Friday, February 21, 2014

Allen Gammons, Broker/Owner Prudential Gammons Realty

 

Turn on any financial news program and at some point you’ll hear the experts extolling the virtues of diversification. Real estate, even through the market downturn, has long been considered a conservative, long-term strategy to growing wealth.

In fact, that very downturn has created a historic buying opportunity for potential homebuyers and investors alike. The combination of lower home prices across Rhode Island and historically low mortgage rates, two essential factors that usually don’t trend in the same direction, have triggered a buyer’s market in many areas. For real estate investors who want to rent their properties, this can make the difference in achieving positive cash flow sooner or right off the bat.

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Ensuring a Successful Investment

While some seasoned real estate investors make it look easy, to be successful, beginners should follow some basic principles.

-Learn all you can. Before committing your cash, you should have a fundamental understanding of real estate. For example, be aware that, in general, investment properties are not liquid investments. Barring exceptional circumstances, real estate does not sell at a moment’s notice. It could take days or months to sell a property, depending on the strength of the market in a particular region.

-Consider cash flow. You’ll need to have enough capital on hand to cover any short-term losses due to vacancies between tenants.

-Start small. Look into buying a condominium, single-family home or a duplex. Leave large apartment buildings and commercial properties to the pros.

-It is also important that you have a Realtor representing you that has extensive experience in the sale of investment properties in the Rhode Island Market and can help you make proper decisions to protect your investment. A good relationship with a CPA will also make your decision making process that much easier.

-Inquire at the local Chamber of Commerce about companies relocating into or out of the area. Company movement is one indicator of demand for rental and/or office space.

-Find a property that will be in demand. Look for a moderately priced home with three or four bedrooms, two bathrooms, and a garage that sits on a quiet street.

-Research the property. The most common way first-time investors lose is by failing to investigate a property thoroughly. Look beyond the front door. Investigate the reputation of the school district, the crime rate, and plans for expanding a nearby highway or developing vacant land. Ask a local real estate professional about the area, its history, and how fast (or slow) properties are moving.

-Inspect the home you’re considering for signs of water damage, such as stains on the ceiling and crinkling or gathering wallpaper; open and close every door and window; and check all electrical sockets by plugging in an appliance. Get an independent home inspection, roof inspection and termite inspection. Unexpected repair costs can eat away your cash flow. Because even the best inspection can’t always predict problems, try to set aside some of the rental income for unexpected repairs.

-Spend time driving the streets of the neighborhood noting the condition of other properties. Are lawns maintained? Are roofs in good shape? Are homes kept up?

-Be ready to make fixes quickly and respond to the renter’s needs. If you’re not prepared to be a hands-on landlord, consider hiring a property management firm.

-See your tax advisor for related planning and laws that can affect your investment decisions.

-Remember, investing in a property is much different than living in one, and while emotion and attachment can be prime motivators when it comes to homes, it is return on investment that counts when investing in real estate.

 

This column is part of an ongoing sponsored content series with Prudential Gammons Realty.

Allen Gammons can be reached at (401-886-6100). Prudential Gammons Realty is an independently owned and operated member of The Prudential Real Estate and Relocation Services, a Berkshire Hathaway Company. Equal Housing Opportunity .

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Related Slideshow: 10 Great RI Houses That Just Came on the Market—February 20, 2014

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South Kingstown

21 Canopy Ln

4 beds, 2 baths

$435,000

This is a beautiful Colonial located on a private cul-de-sac. The newer home offers all modern amenities, a dramatic entry with high ceilings, office, formal dining room, hardwoods, fireplace, huge master suite, 2-car garage, deck, and sprawling yard.

Days on the market: 2

To see more of this property, go here.

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Warwick

3 Alicia Circle

4 beds, 3 baths

$519,000

Check out this gorgeous Colonial, built on a private cul-de-sac. You're bound to be charmed by the picturesque country setting and wowed by the easy access to all amenities. The bright and open plan features 9 ft ceilings, granite kitchen, hardwoods, library, walk out lower floor with a rec room, and workshop.

Days on the market: 2

To see more of this property, go here.

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West Warwick

45 Bramble Ln

3 beds, 1 bath

$190,000

Don't miss this opportunity in popular Greenbush. This is a 3+ bed home with 2-car garage. The full walkout lower level has 2 fully finished rooms and a large unfinished room waiting for your personal touches. The possibilities are endless with this property, and with easy access to 95.

Days on the market: 2

To see more of this property, go here.

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Portsmouth

53 Sandy Point Farm Rd.

2 beds, 2 baths

$499,000

Built in 2007, the chance to own this property is a rare opportunity. Its had one owner, is in pristine condition, with top of the line upgrades. Enjoy the cherry floors, cathedral ceiling, granite and marble baths and kitchen, stainless steel appliances, gas fireplace, onsite pool, tennis court, and stables, and top it off with a short walk to the beach.

Days on the market: 2

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Pawtucket

182 Raleigh Ave.

4 beds, 1 bath

$379,900

This lovely home on a corner lot in Oak Hill features an open floor plan, period detail, large front porch, fireplace, updated kitchen and baths, new windows, third floor loft and master bed complete with a dressing room. It's also a convenient walk to the farmer's market, restaurants, shops, and bus.

Days on the market: 3

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Cranston

580 Natick Ave.

3 beds, 2 baths

$295,000

This gorgeous home is a classic Colonial with farmer's porch. It offers a huge master bedroom, and open granite kitchen with hardwoods and a fireplace, as well as central air and plenty of storage.

Days on the market: 7

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Bristol

13 Gladding St.

3 beds, 2 baths

$405,000

This home has lots of space for everyone. In mint condition with plenty of natural light, you'll find a newer kitchen and fabulous jacuzzi baths within these walls, as well as gleaming hardwoods and a front-to-back family room with sliders to patio and deck.

Days on the market: 7

To see more of this property, go here.

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Newport

88 Third St.

2 beds, 2 baths

$459,000

How great is this brigh and sunny Newport home? With a location in heart of Newport's Historic Point Section, walk to all of town's famed waterfront activities. This home is super fresh with new paint, an upgraded kitchen, and many recent upgrades, as well as a stunning back yard with bamboo and kio.

Days on the market: 9

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East Greenwich

29 Wildwood Trl

3 beds, 2 baths

$329,900

This home is neat as a pin! Move right into this pristine home with lots of space. Amenities include garage, large family room with fireplace, skylights, updated kitchen and baths, large back deck, formal dining room, finished basement, and nicely landscaped good size yard.

Days on the market: 2

To see more of this property, go here.

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Scituate

72 Oakwood Dr.

5 beds, 4 baths

$615,000

This spectacular Victorian sits on a sprawling, private 2.79 acres. With over 4,000 sg. ft., you'll find a special in-law apartment, hardwood floors, large kitchen with granite counters, in-ground pool and a 4-car garage.

Days on the market: 3

To see more of this property, go here.

 

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