Investors who want to become landlords need to get their head examined…
Instead, they must look for a great real estate agent, a great location, a great bargain, and features that appeal to prospect tenants.
Then they need to focus on net positive cash flow of multi-family units, rather than speculating on long-term appreciation and potential paydown of the equity in a property, and finally, they need to consider zoning regulations before they buy.
Look For Cash Flow… Not Just Equity
Savvy real estate investors who are interested in buying investment property for the long term know that it’s all about cash flow, not just equity. While new investors may focus on building equity in a new property, smart entrepreneurs are trying to create a positive cash flow that will keep money coming steadily into their bank accounts. An excellent way to do this is by renting or leasing properties.
What Smart Real Estate Investors Look At First
When smart real estate investors start looking for properties, there are certainly a few things that they look for first:
- A Great Realtor – Savvy real estate investors speak to realtors or real estate agents about local properties, and in order to get mortgage advice, management advice, and in order to get information about the rents that the local market will bear. Investors know that they need to research in order to understand exactly how much the need to charge and what they need to buy in order to get the best cash flow possible. They are willing to do the research and ask the questions, and they know that local realtors are excellent sources of information.
- Location –There is nothing more important when buying investment property than location. You’ll want to buy property that will appreciate in value, and is located in an area that offers lots of amenities and potential. Buying a property in an area that is just being renewed and will likely appreciate quickly in the next few years is ideal. While your focus is on cash flow, and not equity, a home that appreciates in value means a home that is in a property that will bear increasingly higher rents. An investment property in an area where homes are rising in value means a property that will continue to mean more money for you.
- Renter appeal –If you’re buying to rent, then you will want to find an investment property that is close to major amenities, public transport routes, schools, and employment opportunities. Every tenant wants to live in a location that is safe, comfortable, attractive, and convenient. Look for a property that offers all of this and make sure that the property you are buying is someplace where you would want to live yourself.
- Zoning –Smart real estate investors look at zoning and the legal implications of renting before they make any purchasing decisions. The truth is, renting or leasing does carry some legal risks and liability. Some homes for sale are listed as having an in-law apartment, but these homes are often not zoned for legal income apartments. Other properties are zoned specifically for renting. You’ll want to check safety requirements, zoning, and liability issues before you start to buy.
Use the guidelines above when searching for investment properties. While these are basic guidelines to know… they are very important to your success as a real estate investor.
To Massive Profits,
Brad Wozny
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Brad Wozny is a real estate investor who has used his Fortune 500 business experience to build solid systems into his real estate investing business to make his business run more smoothly, more profitable, and with less of his time. Brad calls himself a “real estate syndicator” and you can learn about how he invests in his newsletter at 8 Figure Empire <<
