Advice for Investing in Residential Real Estate in Indianapolis
Recently, I have taken a few phone calls and emails from investors who are a bit disgruntled about their investment properties here in Central Indiana. There are a variety of reasons, but they feel like their investments aren’t performing as well as they anticipated.
The vast majority of investors in Central Indiana are very happy with their returns, and they are performing well. Every month, we have investors who are actively adding to their portfolios because they’ve had such good results.
But, for some people, things aren’t going as well.
My business partner and I have been investing here since 2000. We have acquired a significant amount of rental real estate. I can tell you that having gone through many years as an investor and a landlord, sometimes it can be a grind.
DO NOT OVERREACT
Real estate, as you should know, is a long-term play.
If you decide you want an 8 percent or a 10 percent return after your first or second year and you fall short of that, don’t give up. You must let an investment play out over many years before you decide to sell.
If you don’t hit that return, I think it’s a huge mistake to think you should sell it. Selling is expensive in the first couple years that you own a property because there is very little gain made in value, and there will be fees to pay at closing.
We are happy to sell real estate for people, and we do it every month, but there’s a right time and a wrong time to sell.
BENEFITS OF OWNING RENTAL REAL ESTATE
You know the benefits of owning Indianapolis rental property. There are great tax benefits, you can get your home loan paid down by your tenants, and there’s also the potential for long term wealth accumulation.
The key is to stay the course so you can enjoy those positives.
If you have a large repair item that eats up all your cash flow this year, you can probably make it up. The law of averages works pretty well in real estate. So, if you go through a bad stretch, you can anticipate that good stretches are coming.
I recommend you stay the course. I have no regrets about owning rental real estate. It’s been a great investment, and it’s been a wonderful experience.