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Investment Property - What's The Right Kind For You?
Part of learning how to get started investing in real estate is determining what kind of investment property to look for. There are a lot of options to choose from. An investor can buy houses, duplexes, condominiums or apartment buildings - and that is just the tip of the iceberg. They can buy lots and build on them or buy lots and rent them outto people who build on them. They can make “in really good shape” a part of their search criteria, or he/she can search for a property that appears to be in rougher condition than it actually is, in order to negotiate a good price. They can go after owners who are facing in the hopes that they locates someone who is trying to put their property out of their mind so that they can just be rid of it.
There are many possibilities. Which property is the right property for you?
Ultimately, the best property is the one that will generate the most money while not costing you an arm and a leg to get up to speed and run. Getting a property ready to rent might involve rehabbing it to bring it up to code – installing up-to-date appliances and that sort of thing. It might involve a new coat of paint, or even evicting some irresponsible tenants. What the potential new buyer has to determine is, if the building's problems are fixable.
For example, in his book Ken McElroy in his book “The ABCs of Investing,” writes about someone who purchased a building without even visiting the site, and found himself stuck with several tenants who were not just bad. These people were dangerous. The property was in a bad part of the city where the owner should never have purchased a property. When he finally got around to contracting McElroy's property management company, he had lost a great deal of potential income due to over due rental payments.
McElroy's team repaired what they could. Got rid of the undesirable tenants and contracted for the
building, but they couldn’t change the quality of the surrounding neighborhood. The building would never be one that renters with a lot of choices would want to inhabit, simply based on its location. This property would never get the rent that it would have if it just had been situated somewhere else. Most of the building's issues were simply un-repairable.
The old saying, “Location, location, location” is important for a reason. Your property’s Location might be the single biggest factor the real estate investor should think about when looking at potential properties to invest in.
Besides simple viability, an investor must think about how he/she wants to manage their properties. Mr. McElroy recommends that investors contract a property management firm for the expertise and to free the investor to search for more investments, but some investors simply like managing their property by themselves. This kind of person should think about purchasing something that is small enough to manage on their own. Some people are uncomfortable having investors or partners and will be restricted by that as well. When this is the case, smaller and less expensive is usually the best option for them.
However, Mr. McElroy also advises that investors not assume they should start small. If he/she has learned enough to buy investment property in the 1st, they can learn how to work with other people's money. They should remember, however, what he/she is capable of - or what they would consider the most enjoyable way to move forward. The opportunities are almost infinite.
Alex Anderson Specializes In Selling MN Real Estate And Minnesota Investment Properties. Visit Her Website For A Free Copy Of "The Investors' Rental Guide" At http://www.GreatInvestmentProperty.com
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