Are you looking for investment property in Springfield, MO and the surrounding cities? This is the perfect place to start. Investors have found their way back in the market, and are taking advantage of the great deals to be found here. No matter what kind of investment property you are looking for, I can help you find it.
Springfield offers many unique opportunities to a real estate investor, with several local colleges and the majestic natural beauty of the area. Whether you are looking for a property with a great cap rate or don’t know what a cap rate is, I am here to help you every step of the way.
There are several different investment options, from single family rentals, duplex rentals, small apartment buildings to large apartment complexes, and commercial buildings. Each of these potential investments have their own advantages, and potential drawbacks.
Single family homes are probably the least expensive option when investing in real estate. In this market there are 2 different single family home rental markets. With the numerous colleges in town there is a strong student housing market. This is a different rental cycle than traditional single family housing. Springfield offers great opportunities for both investments.
If you are thinking of owner occupying one of the units, a FHA or VA loan for 2 to 4 units, is available. These have the same advantages of low down payments and easier qualifying, that single family FHA and VA loans are afforded. You may also be allowed to count some of the rental income towards your qualifying income. This might be a great way to get started with your income property empire.
Any housing complex with over 4 units is considered a commercial property and subject to commercial loan qualifications. Commercial loans are typically going to require at least 25% to 30% down payment and higher interest rates. These loans also usually require higher credit scores.
Commercial investments are often judged by their capitalization rate or cap rate. The cap rate is the ratio of Net Operating Income, or NOI, to property asset value. As an example, if a property is listed at a price of $1,000,000 and a NOI of $100,000 the cap rate would be $100,000/$1,000,000 or 10%. The cap rate is a useful tool to help an investor determine the rate of return on their investment. The cap rate is a good starting point to quickly compare several investment opportunities.
The cap rate can not be the only factor you look at. Other factors need to also be looked at including future increase or decline of both income and property value. As an example, in an investor buys a property at $1,000,000 with and income of $100,000 the property has a respectable 10% cap rate. Now if the property appreciates in value in 2 years to $1,500,000 with the same $100,000 income, the new cap rate is 6.7%. Now the opposite is true if you can increase the Net Operating Income.
As with all investments, you must perform your due diligence. This is just a brief overview of some of the basics of real estate investing for profit. A Realtor can be a great asset to answer your questions and assist you in finding the correct investment for you.
Create a user account, and I can send daily notices of listings that fit your search parameters, or even changes in price can be sent. Just tell me you’re your investment preferences, and I will be happy to help you find the perfect investment property. The more details you can provide the better! I have direct access to the greater Springfield MLS database, and knowledge of properties currently for sale, so I can help you find the best investment property for you. I look forward to hearing from you soon.
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