I want to touch on investing in Bozeman. Real Estate inventory for 2019 has continued to be lower than expected and prices have increased as you are probably well aware of. However, this results in more renters staying put where they are as buying their first home could be unachievable or more difficult. While this is an unfortunate outcome of higher priced homes, let's dive into the how's and why's investing in Bozeman. I've created some questions to structure the conversation.
5 REASONS WHY INVEST IN BOZEMAN:
1. Investing in the market is like investing in the stock market but can have greater returns in the long haul.
2. If your cash is sitting in a checking account, it's collecting an insanely low interest rate per year.
3. There are more renters in Bozeman then there are homeowners. Think about that!
4. The stability of the Bozeman economy is strong ~ Montana State University (MSU), Bozeman Deaconess Hospital, Oracle, Big Sky development, etc. are employing thousands of folks every year.
5. We have two world class ski mountains within 30 minutes to 1 hour from Bozeman which encourages tourism during our coldest months (Bridger Bowl Mountain and Big Sky Resort)
5 QUESTIONS TO ASK YOURSELF AS AN INVESTOR:
1. How long will you want to own the rental property for?
2. Will you manage the property yourself?
3. If you hire a property management company, have you considered the costs associated?
4. Have you considered what your overall overhead costs would be?
5. If you are managing the investment property from afar, have you considered the process of finding tenants out of area?
5 QUESTIONS GETTING FINANCING:
1. Have you been pre-qualified to do a potential investment?
2. Do you have a minimum of 25% downpayment of the purchase price ready to go?
3. Have you considered what realistic profit margins you would yield at the end of the day?
4. What asset management would you like to know from your lender?
5. Do you have an idea of the interest rate you will have on an investment property?
Please check out my first blog article on INVESTING IN BOZEMAN - PART 1.
FOOD FOR THOUGHT
Every investor has their own preference to be hands-on or hands-off with investment properties. In my personal opinion, it is worth exploring the option of having on the ground eyes and ears on your property. In my personal experience, an ideal investment property is one that is:
- Low maintenance
- In a good (safe) area
- Has some upgrades to the property if it's a little older
- Has a yard
- Solid bones (condition of siding, roof, sidewalks, etc. are in good shape)
We live busy lives so having a property with solid bones and infrastructure is equally as important having a solid tenant. If you know you will not be visiting Bozeman a few times a year to check on the property, then it would be recommended to chat with a few property managers how they service their clients from afar and weigh if their fee can still put you on a positive profit margin.
The biggest factor investing from afar (if you don't have someone overseeing your property), is a heavier reliance on your tenant. WEATHER is a big factor for us here in Montana. Bad storms, long winters, snow loads on roofs, etc. can require homeowners to be more mindful of their properties when least expected.
Marisa Owen - Realtor