Important Considerations When Buying Investment Property

It’s no secret that there are some investments that are better than others. For instance, while there are great gains to be made in the stock market, there is often too much volatility for a person’s risk tolerance. This takes away the main source of investing, as many people do not understand any other way to invest their money. With just a little research though, you can learn all about buying investment property as an excellent means to potentially increase your wealth.

While it may seem like a straightforward process, there are things to pay attention to so you do not get sucked into a real estate trap. Here are a few important considerations:

    1. The biggest consideration is to make sure to do the research. While on the surface a property might look like a great deal, remember the overall market is slow. A property that looks like a good deal might be priced high compared to similar properties and you won’t realize it if you don’t put in the legwork in respect to research.

 

    1. Your best bet is to buy properties that have several units. While it might seem easier to buy a single family house and then rent it out, it can be a money trap if the renter leaves suddenly. If one out of one tenant leaves, the investor is left with no cash flow. By investing in a property that has several units, if one is vacated suddenly the landlord still has cash flow from the other tenants.

 

    1. Investment properties are not simple buy and hold investments. They require attention and upkeep. Without performing basic maintenance the building could quickly become uninhabitable leaving the investor with a loss of not only their investment, but also their cash flow.

 

  1. Being a landlord can be considered a full-time job. Unless the income from the multiple units is enough to pay a property manager, the investor should be willing and able to dedicate a number of hours to maintaining the property, collecting rent, and overall dealing with needy tenants.

 

As the housing market continues to go down, many landlords are looking to get out of their properties and simplify their lives. But for those smart enough to look into multifamily real estate investing, this is the best time to get started. The price is right, the tenants are readily available as they can no longer afford their mortgages, and the investment has the potential pay-off handsomely.

Gain Wealth and Minimize Risk

During times of great stock market turbulence, there are many people that are looking for a place to accumulate wealth that does not have as much risk as some of the more traditional investing options. Let’s face it, people want something that will not keep losing value every time some bad news is announced on the television. For those that are willing to put in a little bit of extra work to provide that extra income, there are multifamily real estate investments out there that could be the perfect fit for them. Buying investment property is easier than many people think, and the rewards might be much greater than they expect. You just need some coaching on how to find them.

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