Unless your head has been in the sand over the last couple of years, it is nearly impossible to go more than a day without hearing the enticing message, "Get Rich on Real Estate with No Money Down." It seems there is no end to the infomercials, books, magazines, and mail–outs telling you how you too can jump on this wonderful bandwagon of endless wealth. How does someone go about investing in real estate intelligently, though? With professional guidance, of course!
Recent headlines include, "NAR Bullish on Housing Market," "Real Estate Insiders Seize the Day In Hot Real Estate Market," "Too many homes are on the market, and prices are falling fast...," and "Slow Market Crisis: Stuck with Two Homes." Pick a side – any side – of this argument and you will find supporting evidence aplenty! Should you invest in residential properties or commercial? If residential, should you invest in "flip" projects or "rental" projects? If commercial is your cup of tea, should you invest in retail, office, or industrial properties? Even among the savviest of investors, these are difficult decisions to make when the media is flush with information that can be difficult to sort out.
The truth lies somewhere amongst all of these headlines and anecdotal stories about your neighbor's friend's brother–in–law who "hit–it–big." San Antonio has become one of the most shining examples of a vibrant business community that has helped drive the increase of business relocations and as a consequence, real estate prices. With the population expected to grow another 300,000 people over the next 10 years, it is often quoted as among the "best places to invest in real estate in the country." This fact has not been lost on many big name investors from both coasts of the country driving huge deals in the commercial markets as well as residential development.
But just like the tech stock bust of 2000, many other real estate markets have felt the crunch of prices rising faster than income and shifting population trends. And if one thinks that we are immune to this in San Antonio, just look at the latest numbers of rental houses in the San Antonio MLS – over 2200 as of November 27. Th is number is large when one considers that most of the "get rich quick" schemes are predicated on buying rental homes on leverage. Could this be dangerous with so many people owning rental homes they cannot rent? Only time will tell. (Please note that this isn't meant to be bad news, just stress the point of working with your professional advisors – in this case, real professional property managers that can keep rental homes rented for a fee).
The truth of the matter is that real estate investing can be a profitable and an exciting portion of the investor's portfolio. And like almost any wealth manager will tell you, decisions are best made with the knowledge of your own professional advisors such as your Realtor, accountants and attorneys (most notably a good real estate attorney and estate planning attorney). Their job is to ensure that the financial decision you make are sound and sober, carried out efficiently, and coordinated with all of your advisors according to a PLAN. Most wealth managers and advisors will seldom tell you that their job is to take an emotional decision (YOUR money) and put numbers to it. Unlike institutional investing where pure numbers drive the decision to invest, most successful families will have some emotional tie to their investments and the decisions made with their own money will either keep them up at night or help them sleep soundly! No matter which avenue of real estate investing you plan to pursue, make sure that your trusted advisors help you make the most informed decision possible and insist that they talk to each other for your family's benefit.
