The goal of any real estate investor is to earn as much as possible with minimal risk. This is only possible if you know how to make smart choices. The following three things make for an excellent real estate investment to help you get started.
Firstly, you need to find a good return. Real estate is an illiquid asset that requires you to minimize on your liquid assets. What you should look for is to get the same or similar rate of return. This means that you should find a true cash flow property, and not a money pit.
Your investment should also be as low risk as possible. Real estate is never risk-free, but some have much higher risks than others. If at all possible, avoid tenant-in-common options, fixer uppers, real estate development and private real estate funds. It is highly unlikely that you will ever see a return on these options. It is much better to look for interesting properties that are wholly your own. These decisions should be made based on research and analysis, as well as due diligence. Next, you need to find a property that doesn’t require a lot of management or time. Hence, you don’t want to invest in a holiday home, a college home or a property in a bad neighborhood for instance. You should look for properties that people with good credit profiles will rent for extended periods. You will only be able to achieve this, however, if you also commit to being a really good and respectful landlord. All properties will have some sort of issue at some point, but this should be manageable so long as you deal with them quickly.
These are the great properties you should look for if you want to invest in real estate. You want a property that requires minimal maintenance and management. Unfortunately, finding these properties can be quite difficult. You need to be able to invest a lot of time in order to find these properties. You need to research and analyze and look into the available options. Generally speaking, when someone wants to invest in real estate, they just want to get started straight away. You should never invest in something that isn’t as secure as it can be, even if you have been waiting for a long time. Unfortunately, a poor investment decision in the world of real estate can be incredibly costly and it will be hard, if not impossible, to ever see a positive return.