If you want to invest in real estate, you probably want to make money as quickly as possible, with as little risk as possible. You can only achieve this if you know how to make smart choices. This means you need to know the three things that make a great real estate investment.
Firstly, you need to find a good return. Real estate is an illiquid asset that require you to take money out of your liquid assets. Try to make sure that the return rate you get is the same as what it was on your liquid assets. Basically, you must find good cash flow properties, not money pits.
If you use this knowledge and apply it to real estate, you need to look for cash flow rather than appreciation. 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. What you should do is leave your cash flow alone, and keep that as savings as much as possible. Plus, your cash flow can increase as rent prices go up over time. If you have a good mortgage construction, where your payments stay the same, this is even better. You should be looking at a cash flow of at least 20%. 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. You want a property that requires minimal maintenance and management. Unfortunately, finding these properties can be quite difficult. You need to have the time available to actually find these properties. You must spend the time to analyze and research any options available to you. Most of us who are ready to invest in real estate want to do so immediately. You need to be very careful to not jump into a poor investment just because you cannot find something good straightaway. Make a wrong decision in the world of real estate, and you stand to loose a great deal of money that you may never be able to recover.