The goal of any real estate investor is to earn as much as possible with minimal risk. Only if you know how to make smart choices will you be able to achieve this. Luckily, if you know the three things that indicate a great real estate investment, you are a step closer to achieving that.
You should look at rental properties like stock markets. Although most of us aren’t stock brokers, we do tend to have an understanding of the system, and we know that we have to spend money to make money. However, there are no guarantees at all that stocks will actually perform well. This is also the case with retirement calculators, who literally have to guess when we die. The problem is that if there is a mistake in this estimation and you actually live longer, your final years will be spent in poverty.
In terms of real estate, therefore, you should look not for appreciation but rather for cash flow. The cash flow of a property is the money you have left over from the rental price after you have paid for all the necessary bills in relation to that property. The best possible investment allows you to leave your cash flow untouched in a bank account somewhere. Your cash flow will also go up as rent prices go up. This is particularly true if your mortgage payments stay the same. The best cash flow is at least 20% of your overall income from the property. Make sure you take advantage of the online availability of cash flow calculators.
If you want to make good real estate investments, these are the things you should look for. A perfect investment property is one that requires as little maintenance and management as possible. Unfortunately, this can be quite difficult to achieve. To find these properties, you will need to invest quite a bit of time. 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 need to be very careful to not jump into a poor investment just because you cannot find something good straightaway. The reality is that if you invest in a terrible property, then you will struggle to every see a return on investment and you are more likely to actually lose money.