Corken Q & A: How Purchasing an Investment Property Can Help Your Financial Future
It’s no secret that real estate is one of the best long-term investments around. Despite a continuous ebb and flow of market conditions, history has proven that real estate holdings generally increase in value over time and are generally less volatile than other investment options, like the stock market. Wise investors know that portfolio diversification is crucial, and real estate can be an invaluable part of that mix.
In many situations, owning a variety of properties is a key component of a healthy financial future. For someone seeking an additional revenue stream or alternative financial strategy, property investments offer smart solutions. In situations where you may be having trouble selling your current home, dream of owning a second or third home for vacation use, or need cash flow to fund another investment, real estate proves to be a valuable opportunity.
Here, Lori Corken, owner and managing broker at Corken + Company, talks about how an investment property can help you meet your financial goals.
Q: What are the benefits of owning multiple properties?
A: A house is like a little money machine. Once you own property, you can leverage it to do a number of things. You can re-finance it and take the money out. You can sell your house or lease your house. You can do an “owner-carry” or a rent-to-own situation where you become the bank for someone who can’t qualify for a loan. With multi-unit properties you could live in one of the units and rent the other units to pay the mortgage. Tenants generate cash and can offer stability in a changing market. It’s just a different kind of investment. You can put your money in mutual funds, or you can put it in real estate.
Q: What factors should someone consider before purchasing an investment property?
A: You need to think about how long you plan to own the property, your expectations for investment returns, and how much you can afford to buy. Be honest with yourself about what you can afford--is it realistic? Do you want to buy in cash or finance it? What is the ultimate goal? It’s important to know what your long term plan is. Do you want to live in it or rent it? Is this your retirement plan or do you want to flip it?
Q: We’ve all heard the real estate motto “Location, Location, Location.” Are there any specific Denver areas or neighborhoods where you would recommend people look for investment opportunities?
A: Denver neighborhoods like Baker, Park Hill and Five Points are good targets for investment properties because they’re close to downtown and that’s where you see the scrapes happening. If you buy on the perimeter of where it’s about to turn into a hot area, you’re ahead of the curve. In the south suburbs like Lone Tree or Parker, it’s more about families and commuting. North or South, proximity to the light rail is an important feature. There are parts of Aurora that are booming right now because it’s a massive area and it’s close to the airport. It has a huge rental market.
Q: Owning multiple properties means you have to manage multiple properties. Some people might say that property management is too much work. Is this a common issue with real estate investing?
A: Renting is more of a norm today, and the headache of dealing with renters is just a common misconception, not the reality.
Q: Are there any other common misconceptions about investment properties that you’d like to debunk?
A: You don’t have to sell your house to buy more houses—remember playing Monopoly? If you’re not in the market to sell your house, or if you’re having trouble selling your house, maybe you could buy some houses instead.
Corken + Company is a full-service real estate firm that has been expertly guiding clients to creative real estate solutions for more than 20 years. To learn more about how purchasing real estate might help you reach your financial goals, please call 303-858-8003 or visit https://www.corken.co/.
The suburban city of Littleton offers an idyllic mix of location, community and culture to its 45,000 residents. It was recently rated the No. 2 Best Small City in America by Wallethub.com and one of the Five Best Cities for Families in Colorado by Livability.com. In a recent citizen survey, more than 95 percent of citizens rated the quality of life in Littleton as “good” or “excellent” for reasons like scenery, outdoor access and schools.
Originally founded in the late 1800s during the gold rush, the rolling plains landscape of Greenwood Village was once covered with dairy farms and fruit orchards. As subdivisions and shopping centers began to rise on the rural farmland, the city was finally incorporated in 1950. Today, Greenwood Village is a thriving suburban town covering eight square miles of Arapahoe County.
Castle Pines, located 25 miles south of downtown Denver along the I-25 corridor, is a peaceful community of approximately 10,000 residents and 850 businesses in a 10-square-mile radius. This young, rural-suburban area is sought after for its scenic natural landscape, access to outdoor recreational activities and luxurious amenities like gated housing communities and championship golf courses. In 2013 it was ranked No.17 on Money Magazine’s “Best Place to Live” list as a top-earning town.
Located about 23 miles southeast of Denver, Parker is known as a rural, yet upscale town, that takes pride in its quiet, family-friendly neighborhood streets. Its agricultural roots as a farming town is evident today with its abundance of sprawling horse properties, golf courses and public open spaces.
Cherry Creek is a highly coveted Denver neighborhood known for its beautiful, tree-lined streets and its luxury shopping, dining and real estate offerings. Located just 10 minutes from downtown, Cherry Creek strikes the perfect balance between the beauty and comfort of a suburb with access to big-ticket urban amenities.Not to be confused with the affluent suburb of Cherry Hills Village, located 10 miles south of the city, Cherry Creek is renowned for its collection of classy clothiers, art galleries and boutiques, making it a mecca for those who want to see, be seen, and look good doing it, too.
Lone Tree is a flourishing community in Douglas County known for its abundance of shopping, dining and entertainment amenities. It is also a hub for business and healthcare services and has grown considerably in recent years with the addition of the Charles Schwab campus and the expansion of the Sky Ridge Medical Center.
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Outdoor entertaining is a great way to give one last salute to summer before we all get ready to head back to school and back to the grind. Whether you are looking to buy a home in the area, plan to sell a home after the summer season or have been in your Denver neighborhood for years, hot weather, yards in full bloom, and kids bronzed by the summer sun makes a last minute outdoor event an irresistible proposition for an otherwise uneventful July or August evening.