Philip Sobeck Explains How to Identify Profitable Real Estate

It may seem difficult to find a profitable real estate investment. There are often few statistics available on individual properties, and it may be difficult to decide which business opportunities are best. Philip Sobeck, a real estate professional, details the ways in which investors can ensure their success in the real estate market in Albany and around the New York area as a whole.

Study the Data

Before making an investment in any property, it pays to find statistics to guide your financial search. Business trends, vacancy rates, and local real estate transactions can be important indicators for a real estate search. For example, if the area you want to invest in has had significant increases in its vacancy rate, that could be an indicator of economic trouble in the area. Prospective investors should look at historical data as well, getting a complete economic picture of the area in which they want to buy.

For example, in New York State, there was a 4.1 percent growth in new home listings between the first quarter of 2018 and the first quarter of 2019. Overall, the median sales price of all New York homes rose 6.8 percent in the same calendar year.

Find Areas with Strong Growth Potential

If home prices in an area are on the rise, it can be a good time to buy. You must watch out for any possible “bubble” conditions, however. Looking at historical data and comparing the property itself against the local area’s median price can be a help in deciding whether the property will conform to the local market direction or whether it is affected by other factors.

Look Outside Your Local Area

It is smart to look outside your local area when making real estate investments. Other parts of the country may have lower prices and less depreciation than where you live. Investing in properties remotely may be difficult due to the extra travel and the need to find a local management company but diversifying a portfolio between geographic areas is always wise.

Look at Supply and Demand

As with all business decisions, the best place to buy an investment property in Albany is where the demand for properties is higher than the supply. This leads to high rental income through high occupancy rates. Occupancy turnover is expensive for the property owner and can cut into profits.

In an area where population is increasing, like New York, rental property is a great investment. It will enable property owners to take advantage of market conditions in order to make money.

Strategies for Rental Properties

In today’s rental industry, property owners have the option of renting their homes to a single family for a longer period of time through a month-to-month or annual lease or renting their homes night by night as a short-term rental like an Airbnb. Philip Sobeck says that both methods of renting can make financial sense depending on where the property is located.

If the property is in an area with a lot of amenities like restaurants and attractions, or if it is located in an exciting part of town, it may make sense to rent it short-term. However, someone must be able to service the property each time it is rented. Hiring someone to clean the rental and prepare it for the next customer can be expensive.

Property owners need to weigh turnover costs for longer-term rentals as well. Many properties which are rented long-term have a lot of wear and tear and need to be fully or partially renovated each time a tenant moves out. Choose tenants with care and make sure to check their references.

Making Money with Real Estate

Making money with real estate involves a great deal of research and planning. It can also be a matter of sheer luck. When deciding whether to buy a single-family or rental property, consider the costs of owning each. Renting a property in an area where vacancy rates are low can create a steady stream of income. When buying a home in a relatively stable area like Albany, the long-term investment can be worth more than the short-term.

Philip Sobeck encourages all Albany investors who want to put their money into residential housing do their homework. When investors think carefully about the risks and benefits, they will be more likely to achieve success.