Buy Investment Property To Accumulate Real Estate Wealth

Posted on: April 16, 2012

Categories: Buy

Author: Buy Fix and Profit (Guest)

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Image by noah wesley via Flickr

Indeed, property investments are one of the many ways to make big money. No wonder more and more people are jumping into the bandwagon of property investment. However, the decision to buy investment property is not to be taken lightly. It’s an open fact that there are some investments that are better than others. Another fact is that a lot of people have been sucked into a real estate trap. This is because property investment seems like a straightforward process, but in reality, there are things that you need to pay attention and tricks that should be learned so you do not get into the trap. With just a little research and patience, though, you will learn how to buy investment property, and how you can potentially increase your wealth.

Some Facts Worth Noting Before You Buy Investment Property:

> A property might look like a great deal on the surface, but without doing some real leg work, you might find out too late that it may be priced higher compared to other similar properties. This happens when you do not do enough research, make comparisons and seek expert advice.

>One of the greatest downfalls in investing is poor cash flow. While it might seem easier to purchase and manage a single family house and then rent it out, it can turn into a money trap if the tenant suddenly leaves. So when you buy investment property, make sure to have a contingency for such vacancies, by setting aside a certain percentage of rental income to fund such a down time and by asking for a a deposit and advance payment from the tenant.

>Even with flipping properties, investment properties require upkeep and some maintenance, at least. More so with buy and hold investments. Neglecting to perform basic maintenance to the building could quickly lead to deterioration, thus making it uninhabitable, and eventually loss of investment and cash flow. You may also be breaking local rental laws.

>Before you buy investment property or enter into the investment business, you, as the investor, should be willing and able to dedicate a number of hours to maintaining the property, collecting rent, and overall dealings with tenants because being a landlord is considered a full-time job, unless, of course, you are willing to set off income from your property to hire a property manager.

Buy Investment Property To Gain Money, Not Lose Money

Let’s face it, investors want properties that will not keep losing value despite some bad news knocking on the real estate market every now and then. As an investor, your aim is to gain money, not lose it. A few sensible advices from the experts are:

First of all, take a look at the numbers. Your property should have a positive cash flow to cover all of the property’s expenses such as property taxes, insurance, financing, repairs and maintenance.

Secondly, always consider the location when buying property. If you’re considering going into rental, the rule of thumb is to buy properties in the best neighborhoods, although this may always mean shelling out a larger sum. The amount of rent and the type of tenant is determined by the neighborhood where your property is located.

Lastly, avoid spending too much on house improvements of a property. Instead, just keep the home comfortable, presentable and functional. People choose neighborhoods for a reason, so make sure the home is comfortable and decent enough to live in.

Property investment requires a fair amount of due diligence. So, learn the laws, the tricks and the ins and outs of the trade so that when you decide to buy investment property, you will keep the profits flowing in for the long haul.

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