Over the years I have been asked that question many times. There are solid reasons to buy investment Real Estate in Bethlehem, or Easton, or Allentown. Generally there are more tenants in higher population areas, creating more competition for available rental units. Tenants often need the infrastructure that cities provide. If you buy an investment property that is on a bus route for example, people who don’t drive will find it more appealing than if you buy an investment property off the beaten path. In addition, there are more jobs in cities than in rural areas, so the jobs will be closer to the tenant as well.
But why invest in Bethlehem area real estate when you are young? Many younger people today are not even buying homes, let alone investment real estate. The reason is clear; an investor in real estate is able to leverage money. That is, that $200,000 investment property can be purchased with a much smaller amount of cash than that. In fact, for around $50,000, and investor can buy that $200,000 investment. That means that at the end of the mortgage period, typically 20 years, the investor will have an investment worth four times the money he invested. Pretty good investment, right? Well, that is just part of the equation. When an investor buys real estate, in addition to value of the property, the chance is very good that over 20 years the property will double in value. That means that $50,000 investment will be worth $400,000 in 20 years, or a 11% rate of return each year.
Buying investment real estate in the Lehigh Valley can be very lucrative, but has its potential downsides as well. For example, the tenant might not pay the rent. How long does it take to evict a tenant? Another example is that major capital improvements need to be made, and the investor does not have the money to invest in the improvement. Or the tenant breaks stuff. Or lots of other things. At Plaza Realty we have over 30 years of investment experience. Currently we manage over 60 units; we have seen most problems. We can help minimize problems and give advice.
real If you are interested in finding more about how to invest in real estate, contact us.