Ashe Morgan: Your Ultimate Guide to Real Estate Investment
When it comes to purchasing a real estate property, the first thing that comes to mind is a home. Basic rental properties make up the traditional method of gaining profit, wherein a real estate investor purchase a property, have it rented, and becomes the landlord, who is solely responsible for paying the taxes, mortgage, and the property repairs and maintenance. As a landlord, it is your choice if you want to charge just enough to cover your expenses until the mortgage has been paid for the rental cost to be appealing to future tenants, or to charge more to produce a higher monthly profit. A real estate investor must know the market so it is important to equip yourself with the right knowledge, skills, and attitude toward real estate transactions, whether buying or selling, and hire a real estate expert if you need help.
For a real estate investor who is seeking for an income stream from real estate rental properties, it is a must to consider the location of the property as well as the market rental rates. It is a good idea buying a prospective rental property within or near developing communities where new infrastructures like schools, hospitals, and office buildings are still being built, so you can take advantage of low-priced real estate property rates, and gain higher profit once those infrastructures are completely operational with students and employees as your prospective tenants. You don’t want to have a poor paying tenant that will leave you with a negative monthly cash flow, so it pays off being strict about requirements such as credit report to know the paying capacity of the person who is interested renting your property, and obtain a renter’s resume if possible showing relevant information about character references and previous landlords. If you have several rental properties to handle, it is a wise decision to hire a property manager so you can focus on the most important aspects of your real estate investments because doing it on your own is really daunting, stressful and time-consuming.
If you are not into rental properties or if you think being a landlord is just too tedious for you, you may consider flipping or be a real estate trader, wherein you can buy real estate properties and hold them for a short period of time, usually no more than 3 to 4 months, and in turn sell them for higher profits. Flipping is being considered as a short-term cash investment wherein a flipper don’t spend any money on repairs or property improvements because the real estate investment has to have an intrinsic value to make profit without any alteration. There are also real estate investors who renovate reasonably priced or cheap properties to increase their value, and sell them for a higher price.