Real estate investing can provide its owners with anything between a little extra cash flow, a safety cushion of equity, or generational wealth. But, of course, it all depends on your goals, how you structure them, and what you put into them.
One advantage of investing in a single-family property is multiple exit strategies. You can sell it to another investor rent-ready or with a tenant in place.
Multi-family apartments typically get built from the ground up. That makes them great to operate as rental properties.
Many investment styles can work. Real estate investing is not a one size fits all sort of process. It is crucial to figure out your preferred investing model, define what property fits this model, and find a property that fits these criteria.
Getting a loan on an investment property can be a bit different than a mortgage on your primary residence.
Hard money lenders are typically more aggressive with their lending criteria and look at the asset backing the loan for security and less to the borrower’s ability to service the interest.
When purchasing your first investment property, deciding whether to hire a property manager or self-manage is a significant decision.
When considering the learning curve for all the aspects of self-management, you might decide that the best option is to hire a professional property management company.
There are tax consequences to owning an investment property. However, many of these consequences can be favorable for the investor. That is why it is a good idea to have an accountant that understands real estate investing and can help you project, plan for, and position yourself to take maximum advantage of the tax consequences of your investments.
Real estate investing can be an excellent option for many people. However, going from zero investment properties to one is a daunting task. Working through it methodically, creating a model, and a team can make this process more approachable. It is essential to consider cash flow, appreciation potential, and stability when picking properties.