There are three ways folks are purchasing investment properties in Omaha right now. With higher interest rates, it’s hard for properties to cash flow like they did the last few years. Especially as rents have leveled off.
Investors are using larger downpayments so the property cash flows. This makes their monthly PITI payment lower and more cash flow
Investors are stomaching break even cash flow or barely any positive cashflow. This strategy is banking on the property appreciating and is NOT advisable, unless you have plenty of extra income from your regular job (or other investments) to cover any unexpected expenses
Investors are buying off market properties that are under market value either through wholesaling or word of mouth
Typically, you want to invest in properties that meet the 1% rule (at bare minimum). Meaning, the monthly rent is 1% of purchase price. This builds in a cushion of 10% for repairs, maintenance, and savings for a larger repair.
In Omaha, the 1% rules is rarely happening right now, unless you’re in the third category. In the long run, people don’t regret investing in real estate. In the current interest rate environment, you have to manage risk and ensure you have plenty of cash from other income streams if the investment isn’t covering itself.
These are three of the ways people in Omaha are still investing in real estate. For more specific information on investing in real estate, don’t hesitate to reach out! Investors are still buying!