Wednesday, October 12, 2016

Choosing The Right Investment Properties For Beginners

By Nancy Bennett

A lot of people believe that buying real estate is one of the best ways to invest money. They are often correct, but not all real estate offerings are good deals. If you're interested in starting to purchase investment properties, but don't really know how to go about it, there some good tips out there to help you. You will probably want to start with something small and conservative when you first buy. Some of the most popular beliefs about what constitutes good investing may not turn out to be the best ideas for you.

You may have heard that location is everything, but this is not necessarily true. When you are first investing, you probably don't want to take on beachfront property or high end condominiums. You are usually better off purchasing real estate with good cash flow in middle class neighborhoods. It may not seem very exciting, but you will have a surer chance of getting a steady return on your investment.

In the beginning you might be tempted to purchase property based solely on the price. This is usually a mistake. You should avoid purchasing in neighborhoods where there is a high vacancy rate. If houses are standing empty, there is probably a good reason for it. You might spend more on the front end, but it will pay off over time.

For investors who purchase real estate to rent or lease, having good tenants is vital. Before you sign any contract, be sure you see the rent rolls and the turnover rate. This will tell you a good bit about the quality of the tenants you are going to have. Real property with high turn over and lots of rent delinquency will be a headache for you long term.

It's usually a good idea to buy real property that is in as good a shape as you can afford. A lot of people get mired down buying appliances, laying new carpet, and installing energy efficient windows and doors. It can take forever to get your money back out of this type of property unless you are already in the construction business.

When you first start to invest in property, you will have to decide what you're going to do with it over the long term. Some people enjoy renovating property and reselling it for a tidy profit. Other individuals are more comfortable making only necessary repairs and renting the real estate to good tenants.

There are certain things a lot of seasoned investors tend to avoid. One of them is buying property with homeowner's associations and complicated covenants and restrictions. These properties can be good investments, but you need to be careful and really know what you are doing. Beginners are usually advised to avoid these investments until they have the necessary experience.

Real estate investing can be fun and very profitable if you go about it the right way. You should decide what your goals and interests are before you go forward.

About the Author:

No comments:

Post a Comment