When we brought our first investment property in 2019, it honestly was not very difficult. I did not look too hard. I simply went to the MLS and looked for a small 3-bedroom home in Palm Bay for sale. I found one and the first one I checked out was the one we bought. Yes, it was scary, but I knew that worst case, we could rent the house for at least $700, the monthly mortgage. A more likely case, was that it would rent for $1,150 and cash flow well, which it did.

Today’s Home Prices

Today is much different. You cannot easily look online for cash flowing real estate. With the interest rates and prices where they are, it is not very easy to maneuver a deal that easily cash flows with rent more than covering the mortgage and operating expenses. In other words, you have to work hard to find these opportunities. Here in Brevard County, home prices have skyrocketed. Palm Bay is a choice destination for movers. Young engineers from all over are moving here for jobs to support Aerospace and the Space sector. Both home prices and rents have risen immensely.

Today’s Interest Rates

Unfortunately, at today’s interest rates, home price increases aside, you can pay nearly double per month for your mortgage than you did when interest rates were 3%. So what is an investor to do? Some investors are giving up on cash flow all together in hopes for appreciation. This is one strategy, but not recommended for most.

Patient Investment Strategy

You see, real estate should pay you in cash flow for the risk you are taking. As they say, appreciation is icing on the cake. One thing I am doing is continuing to look for these opportunities for cash flow. Yes, it is more of a challenge, but deals can be had. They are likely not in your face on the MLS but they exist. Instead of becoming frustrated with today’s market and that I cannot find the same opportunity from five years ago, I am listening to the best investors who have bought properties in various cycles, reminded that this is precisely a time where the savvy are rewarded for their diligence. I want to be one of them, so here is what I am doing:

Looking at opportunities daily
Networking
Saving my cash

The best and wisest are patient and diligent in their search for opportunities and only invest when it makes sense. I will follow this same path with plans to obtain our next rental whenever it makes sense. What are you going to do?