Basics and Benefits of Investing in Real Estate

jamilaasorrell • July 30, 2024

Unlocking Wealth: Essential Insights and Advantages of Real Estate Investment


Investing in real estate is often regarded as one of the best and simplest ways to build wealth. There are several compelling reasons for this, which we'll explore further. A primary reason is that real estate is generally considered a low-risk investment strategy. Unlike many other investments, real estate is almost always guaranteed to appreciate in value over time, meaning you, the investor, are likely to see a return on your investment. This appreciation makes real estate a safe, reliable, and stable option. Real estate plays a fundamental role in our economy and society. In this blog, we’ll cover what real estate investing entails, why it’s a worthwhile investment, and how you can get started.


Real estate investing involves purchasing and selling properties with the aim of making a profit, rather than using them just as a primary residence. Depending on your strategy and goals, you may choose to hold onto these properties either short term or long term. If you’re looking for quicker returns, higher earning potential, and less hands-on management, short-term real estate investments might appeal to you. These can include strategies like fix-and-flip, where you buy, renovate, and sell a property for a profit, or wholesale real estate, where you find properties and sell the purchase contracts to other investors. For those more interested in passive income, building equity, and potential tax benefits, long-term investments are likely more suitable. This might involve owning rental properties that generate steady income over time. A balanced real estate investment strategy often includes both short-term and long-term approaches and can span four main types of real estate: land, residential, commercial, and industrial.


Investing in real estate comes with a range of benefits. Investors can leverage significant tax advantages, including deductions for mortgage interest, property taxes, and depreciation. Additionally, real estate properties generally appreciate in value over time, offering stability and potential for considerable returns. One of the unique aspects of real estate is the ability to leverage your investment. You can often make a down payment of 20%-30% on a property while still benefiting from 100% of the property’s appreciation and rental income. This is a rare advantage in the investment world. Rental properties can provide a consistent stream of passive income, with tenants often covering most or all of your mortgage payments. Another key benefit is diversification. Investing in real estate allows you to spread your investments across different types of properties and markets, which helps manage risk and can lead to more stable returns. Moreover, real estate investing offers the potential to build wealth that can last for generations. As properties appreciate and you build equity, your investments can provide long-term financial stability and growth.


To get started in real estate investing, you need to focus on a few key areas. First, assess your financial situation. Investing in real estate requires capital, whether it's your own or obtained through loans. Review your finances, start saving money, and work on building your credit score. Most lenders require a down payment of 20%-30% and a credit score of at least 620. A higher credit score can secure you better interest rates, which is crucial for maximizing your investment returns. Next, gain knowledge. Educate yourself by reading books such as The Millionaire Real Estate Investor by Jay Papasan, and explore resources like real estate blogs, podcasts, and YouTube channels. Networking with other investors and finding a mentor can also provide valuable insights and help you avoid costly mistakes. Setting clear goals is essential. Define both your financial and business objectives, and establish smaller action steps to achieve them. Understanding your “Big Why”—the core reason driving your investment goals—will keep you motivated and focused.


For beginners, house hacking is an excellent strategy to consider. House hacking involves purchasing a property and renting out any extra space to help cover your mortgage payments. This approach reduces your living expenses and helps you build equity, which can be used for future investments. Many first-time homebuyer programs, like FHA loans and down payment assistance, make house hacking more accessible, especially if you’re new to investing and have limited funds. House hacking also provides practical experience in property management and landlord duties.



In conclusion, real estate investing offers numerous benefits, including stability, tax advantages, and the potential for long-term wealth accumulation. By understanding the fundamentals, assessing your financial readiness, gaining knowledge, setting clear goals, and exploring strategies like house hacking, you can embark on your real estate investment journey with confidence. If you’re ready to dive in or have any questions, don’t hesitate to reach out for personalized advice. Happy investing!


Jamila A. Sorrell is a proud member of NAREB Greater Chattanooga Realtist, and we encourage everyone to get out and vote. You can find voter information in Tennessee here: GoVoteTN.

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By jamilaasorrell • May 28, 2024
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6 Benefits of Buying a New Construction Home

By jamilaasorrell • April 24, 2024
Does it seem like everywhere you go, there's new construction underway on every block? Whether it's new apartments, condos, or single-family homes, the momentum of new development is palpable. Here in Chattanooga, the landscape is evolving rapidly, with projects like Milltown and the new Lookouts stadium ushering in a wave of housing developments across the downtown area. According to the National Association of Realtors, new-home sales, which traditionally accounted for about 10% to 12% of the market for single-family homes, now comprise more than 30%. You might wonder who can afford these homes, but the truth is, they're being built at all price points—from affordable housing to luxury properties. Moreover, builders are making homeownership more accessible than ever before, leveraging incentives that we'll delve into later in this article. With a scarcity of existing homes on the market and compelling incentives from builders, new construction emerges as an increasingly favorable option for both new and seasoned homebuyers. In this thriving market, there truly is something for everyone. Many of these homes are selling faster than they can be built, and there's a good reason for that. Buying new construction homes comes with its own set of benefits. If you're in the market for a new home and weighing the decision between new construction and a preowned property, by the end of this read, you'll have the clarity to make an informed decision about whether new construction aligns with your needs and preferences. Customization As mentioned earlier, many of these new construction homes can be purchased well in advance of their completion, sometimes up to six months to a year before. While this means you'll have to wait until construction is finished before moving in, buying homes at this early stage allows you to become involved in the development process and feel more connected to your property. This level of involvement enables you to customize your home according to your preferences. While most builders offer a selection of floor plans, you have the opportunity to personalize your property extensively, from structural modifications to design choices. For instance, let's say you're drawn to a builder's 4-bedroom, 3-bathroom floor plan, but you find the interior space feels a bit cramped. You may have the option to expand the walls by a few inches on each side, significantly altering the feel of your home upon completion. Additionally, you'll have the chance to personalize various elements, including backsplashes, cabinet types and colors, trims, countertop materials and designs (such as quartz or granite), faucet styles, wallpaper, flooring options, and more. These customizations play a significant role in transforming your house into your dream home, ensuring it reflects your unique style and preferences. Modern Features and Amenities During a recent conversation with a representative from Pratt Homes at their Brainbridge Realtors event, I was intrigued by a noticeable trend in their latest developments—ample yard space, a feature that had been scarce in new construction homes for quite some time. The representative explained how builders draw feedback from homebuyers nationwide to stay abreast of trends and preferences. Not long ago, yard space wasn't a priority for most buyers, and builders adjusted their offerings accordingly. However, with a renewed interest in outdoor living areas among homebuyers, builders are now incorporating more expansive yards into their projects to meet demand. This responsiveness mirrors the adaptability we expect from our real estate agents. Moving into a new construction home offers numerous advantages beyond just spacious yards. You'll have access to the latest trends and amenities, including top-of-the-line energy efficient appliances- which helps reduce utility bills, amenities like pools, private community golf clubs, dog parks, community clubhouses for your convenience, and smart home technology for added security. Plus, the modern bathrooms and kitchens in these homes are not only stylish but also contribute to maintaining the value of your property over time. Warranty Coverage It's no secret that homeownership comes with the responsibility of managing all home repairs and maintenance. This aspect alone attracts many individuals to new construction homes, thanks to the added peace of mind provided by warranties. Most builders include at least a one-year builder's warranty with the sale of a new home, offering homeowners a buffer period to enjoy their property without worrying about costly repairs. These warranties typically cover structural complications and may also include separate coverage for appliances, although registering appliances with the manufacturer may be necessary. However, it's essential to recognize that even though new construction homes are relatively pristine, they are not without their imperfections. I always advise homebuyers to conduct a thorough inspection of the property, regardless of its age, to uncover any potential issues that may not be immediately apparent. This not only allows buyers to address concerns they may not have otherwise known about but also ensures they are well-informed about the condition of their investment. Low Maintenance To build upon the previous point regarding warranties, it's worth noting that new construction homes typically come with lower maintenance costs. As the first occupant of your new home, you'll enjoy the assurance of everything being brand new. When you consider the likelihood of maintenance issues and the protection provided by warranties, opting for new construction becomes an increasingly appealing choice. In contrast, purchasing a pre-owned home may involve additional considerations. While you have the option to add a warranty, these typically have limited durations. Additionally, older major appliances may appear functional during the purchase but could fail over time due to age. Structural components like roofs also have finite lifespans. In contrast, with new construction, you're starting from year zero with your entire property and its contents, minimizing concerns about wear and tear. Community Amenities If you're seeking a sense of community in your new home, a new construction property may be the perfect match for you! While some builders construct single homes on individual plots of land, many opt to develop entire communities by purchasing acres of land and building multiple homes. These communities often come with a range of amenities, including pools, gyms, community centers, walking trails, and more. Financial Incentives The final reason we'll discuss today for considering a new construction home for your next purchase is the incentives that most builders offer with their properties. Many builders provide incentives such as covering some or all of your closing costs. It's important to note that these costs are not rolled into your mortgage but are completely covered by the builder as an incentive to purchase their property. Additionally, you may come across offers for lower interest rates, free upgrades, and more. These incentives can significantly impact your budgeting and home search planning. In contrast, sellers of pre-owned homes may not always offer such incentives, or they may need to be negotiated as part of your purchase and sale agreement. Builders, on the other hand, typically include these incentives automatically to assist you in purchasing their properties. From the ability to customize your new home to the potential coverage of your closing costs, there are compelling reasons to consider new construction for your next home. Whether you're a first-time homebuyer or downsizing, new construction homes cater to all needs and budgets, offering options from affordable to luxury. The assurance of owning a brand-new home with warranties covering appliances brings peace of mind, while the opportunity to personalize your space adds a sense of connection and ownership. With access to the latest technology and appliances, you can enjoy modern living at its finest. There are countless reasons to choose a new construction home! If you're in the market for a new home in Chattanooga, TN, and surrounding areas, trust your local agent, Jamila A Sorrell, to guide you in the right direction. With my expertise and connections with builders throughout the area, I'm confident I can help you find the perfect home to fit your needs and preferences. --- Get involved with your community and let your voice be heard. Register to vote! If you need to register to vote, or update your address in Tennessee, you can do so by visiting GoVoteTN .