to build wealth through real estate. A portion of everyone's investment portfolio should include hard
assets or housing. Now, I'm not referring to primary residences, because although most people
would like to consider their primary residence as an investment, you can only make
money on your primary residence when you decide to exit the market. I am referring to income
producing properties. The start of a new year is a great time to plan out your investment
strategies and think about what your investment objectives are. Investing in real estate can
help you build wealth.To the first time investor getting started can be a bit intimidating.
Finding your first investment property and doing your homework is key.
There are two main real estate investment strategies: buy and hold or buy and "flip". Buying
and holding is a great way to build long-term wealth and can be a protection against inflation.
Finding the right investment property and holding it for the long-term is like a blue
chip stock. It may not make you rich over night,but in the long run it will end up
performing well. Buying and flipping is a bullish approach to real estate investing,
no blue chip stocks here. The buy and flip strategy can still be done in today's market,
but the key is finding a property that is under-priced, and in need of primarily cosmetic
fixes, that when completed with allow you to recoup your costs and make a profit.
Regardless of the investment strategy that you follow, patience, due diligence
and the willingness to walk away from deals that are not profitable is critical.
When investing in real estate, the profits are determined when you buy. If you buy too high,
you may have a hard time recouping any costs and may even lose money.
Take your time to find the right property.
and holding is a great way to build long-term wealth and can be a protection against inflation.
Finding the right investment property and holding it for the long-term is like a blue
chip stock. It may not make you rich over night,but in the long run it will end up
performing well. Buying and flipping is a bullish approach to real estate investing,
no blue chip stocks here. The buy and flip strategy can still be done in today's market,
but the key is finding a property that is under-priced, and in need of primarily cosmetic
fixes, that when completed with allow you to recoup your costs and make a profit.
Regardless of the investment strategy that you follow, patience, due diligence
and the willingness to walk away from deals that are not profitable is critical.
When investing in real estate, the profits are determined when you buy. If you buy too high,
you may have a hard time recouping any costs and may even lose money.
Take your time to find the right property.
A big part of evaluating a property is answering the following question: Does this property create
positive cash flow? If the answer is yes, you're on the right track. Positive cash flow means that the property will be able to pay for itself without adding any of your money. It may even provide you with some extra cash. Ideally, the monthly rents should be able to cover all
of the monthly expenses. Remember to look at the big picture, one month of repairs that throws off
your income statement for the month doesn't mean you have a bad investment. Evaluate at least
12 month period and factor in appreciation, depreciation and tax deductions. You want your
investment working as hard as possible for you.
of the monthly expenses. Remember to look at the big picture, one month of repairs that throws off
your income statement for the month doesn't mean you have a bad investment. Evaluate at least
12 month period and factor in appreciation, depreciation and tax deductions. You want your
investment working as hard as possible for you.
Much of the work in finding an investment property is done up front. Find a real estate agent that
understands the economics and numbers behind making a sound investment. A good agent will help
you narrow down your search criteria and make the task of finding your first deal not so daunting.
The location of the investment property will determine the amount of rent you can charge,
the demographic that you are renting to and the amount of appreciation. There are no right
or wrong answers, it just depends on what you are comfortable with. Some investors are
comfortable with investing in lower income housing options, while others are interested
in middle class single family homes.
understands the economics and numbers behind making a sound investment. A good agent will help
you narrow down your search criteria and make the task of finding your first deal not so daunting.
The location of the investment property will determine the amount of rent you can charge,
the demographic that you are renting to and the amount of appreciation. There are no right
or wrong answers, it just depends on what you are comfortable with. Some investors are
comfortable with investing in lower income housing options, while others are interested
in middle class single family homes.
Investing in real estate can be a fun and rewarding way to build wealth. With careful planning,
patience and smart decision making you can start building a sound real estate investment portfolio.
patience and smart decision making you can start building a sound real estate investment portfolio.
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