No matter your age or life stage, finding new ways to increase your income is a good idea. Whether you want to build savings and investments, add to your retirement, or generate passive income, investing in real estate is an exciting opportunity to achieve your goals.
However, thanks to the resources available today, you don’t need to be some sort of a tycoon to be successful in real estate.
Our comprehensive guide will lead you through the process so you can feel secure in your goals. And who knows, once you get started you could just wind up with an investment portfolio full of valuable real estate in Lehigh Valley, PA!
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Reasons to Invest in Lehigh Valley
A metropolitan area of nearly 850,000 people, Lehigh Valley is an hour north of Philadelphia and 90 minutes west of New York (Manhattan, to be exact). A simple train ride to either city, Lehigh Valley has become a refuge to escape high prices in New York, New Jersey, and Philadelphia. With larger lots, grander homes, and access to dining and other amenities, buyers in the area get much more bang for their buck than nearby large cities.
The region is an attractive option for businesses and residents thanks to its central location and robust local economy driven by manufacturing, healthcare, and logistics. The consistently low unemployment rate and population growth support a stable rental market while its varied economy allows investors to diversify their portfolios.
Overall, the Lehigh Valley, PA area is an intriguing prospect for investors looking for profitable opportunities in the real estate market.
Tips to Invest in Real Estate in Lehigh Valley, PA
Once you’ve decided to invest in Lehigh Valley real estate, getting started in the process can be a daunting task. However, with a few simple steps, you’ll be well-prepared to start building your property portfolio.
Define Your Goals and Set Expectations
Successful investing starts by deciding on clear and specific goals. After all, you can’t plot a course forward if you don’t know where you’re going.
Here are some questions to ask yourself and answer to help you decide on your goals:
- Do you want to establish a steady cash flow from rents or capital appreciation?
- How much income do you need monthly, quarterly, and annually?
- Are you willing and able to become a landlord?
- Will real estate investing or property management be your full-time job?
- Do you want to buy something with existing tenants and profits?
- Are you interested in DIYing and selling a property as a rental opportunity?
The answers to these questions will guide you to the best investment strategy for you. You will also be able to set realistic expectations for your investment horizon and returns.
Some further information to further help manage your expectations include:
- Population growth tells you how much demand you can expect for your properties.
- Appreciation rates indicate the overall local real estate market. Look for steady growth and avoid wild fluctuations.
- Property tax rates can significantly reduce your profits if you don’t plan accordingly.
- Price to rent ratio divides the median house price by the annual gross rent. A high price to rent ratio will mean lower monthly returns.
- Income levels will help you set realistic prices to attract buyers or renters.
Prepare Yourself Financially
Many people expect real estate investing to provide quick returns and that they’ll immediately hit a home run. That is often not the case. The truth is investing in property can be a lengthy process and requires you to cover a lot of up-front costs. You might also have to pay for any repairs, upgrades, or alterations to your new investment.
You need to have your financial ducks in a row before you start looking at properties. Determine your borrowing power and secure financing, save enough cash for a down payment plus closing costs, and calculate how long you can afford to live before generating an income (if necessary).
Do Plenty of Your Own Research
Every local real estate market is unique. Real estate in Lehigh Valley is no different in that regard. Understanding market trends and local factors is crucial in making a successful decision. Thorough research on local properties, historical data, and local supply and demand can uncover undervalued properties and project future opportunities.
Look into local zoning laws, infrastructure plans, amenities, and development regulations to assess the long-term profitability and viability of your investment.
Start the Property Search
As anyone who has shopped for a new home can attest, finding the right property for you is no easy task. A good agent will find you the best opportunities but you can find hidden gems with a few tricks:
- Look for For Sale By Owner signs. Not everyone sells through an agent and these properties will often be unlisted.
- Search for vacant rental properties for landlords who could be interested in selling.
- Search for properties on websites such as Zillow and Redfin. Scan rental listings for turnkey properties you could buy whole cloth.
Investing Mistakes to Avoid
The path to investing in real estate can be daunting with plenty of pitfalls along the way. Here are some common mistakes to avoid to save yourself the emotional and financial stress of lessons learned the hard way.
- Failing to understand the current market and not adjusting your offers accordingly.
- Not doing enough due diligence when hiring vendors and contractors, resulting in missed deadlines and cost overruns.
- Wavering when making or accepting an offer. Some investors will miss out on the perfect deal out of fear of making the final leap.
- Looking without leaping. Some buyers will purchase a property without the necessary due diligence and research. These deals can end in disaster for the investor.
Investing in real estate is an exciting opportunity to increase your income and secure your financial future. Real estate has historically provided high long-term returns and provides a tangible asset with a sense of stability. With the information in this guide, you’ll be well-prepared to find the right Lehigh Valley property for your portfolio.
