Getting started on real estate investing can be risky and daunting, but the cash flow streams from rental income properties is a great way to increase your net worth, and can far outweigh those risks. Here are some things to consider if you're thinking
of getting your feet wet on real estate investment.
1. Buy Cash-Flow Positive Properties
Look for a good investment property by calculating the estimated cash returns on the property for that area. Pick moderately priced properties with a higher cash return.
2. Don't Buy Fixer-Uppers
Fixer uppers are tempting to purchase because of their lower price point on the market. It’s much more cost-effective though to simply buy a solid, reliable home that needs little to no repairs.
3. Buy in Working Class Areas
Look for properties in working class areas where rental properties don’t last long on the market. You’re more likely to have your property sit vacant, if you buy in a neighborhood typically occupied by homeowners. It's also best to buy local, since it's
a lot easier to manage a property that is close to home.
4. Have a Cash Buffer
Things perpetually break down and need repairs in properties. If you’re looking into real estate investing, make sure you have a fairly sizable cash reserve to cover the expected and unexpected costs of property management and repair.
Are you planning to buy real property investments? Do your research, know the area, and ask for help from those in your community that have had success. Of course, look for a reliable realtor that can help you find a good home.
Source and some text adapted from: http://www.youngadultmoney.com