Making Good Choices When Investing In Real Estate
Real estate investing can be an incredibly rewarding investment, can be risky business. If you walk into a real estate investment unprepared and without doing your homework, you asking for trouble. But with the right property, a good realtor and some smart decisions, real estate investing has the ability to pay off fantastic gains for those willing to brave the waters. Here are a few tips to help you make the best decisions possible when investing in real estate.
Make Sure The Property Cash Flows
Years ago investors would buy an investment property and rent it out even if it didn’t cash flow. They would do this because they believed that the value of the home would rise so much year after year that they would still make a hefty profit. Gone are those days. A rental must cash flow from day one or the investment becomes too risky.
Buy A Property Already In Good Shape
You have probably seen those people on TV who buy their first investment home, fix it up and flip it for a $50,000 profit. The reality is that most inexperienced property flippers end up loosing money. Invest in a property that does not need major repairs. Most people underestimate the cost and time needed to make these repairs. Unless you are an experienced contractor, go the safe route.
Secure Good Long Term Financing
Don’t get into an investment with the thinking that you will refinance down the road. Refinancing costs a lot of money and will quickly eat into your profits. Secure a low rate 30 year loan and mark one thing off your list that won’t need to be messed with for a long time.