* Location - the number of like properties in the area, economy of the area, one huge employer or many small employers.
* Cash flow - will more money be going out than coming in?
* Managed professionally – maintenance headaches belong to someone trained to handle them - not to you.
The economy of an area makes a big difference in whether the area is a “hot market” or not. When the jobs are there, new ones opening up, and the population is growing, that makes a market hot… plenty of renters. When an area depends on one huge employer, this can make an area not as attractive for an investor because anything can happen to that employer.
One must make sure of facts, however. There is a company in Shreveport, Louisiana which shuts its doors for three weeks every year and lays off over 2000 employees when they do so. This kind of activity can skew area statistics making it seem to be a poor place to invest when that isn’t the true picture. When Boeing shut down, the real estate around Boeing bottomed out, but Canadians swooped in buying up everything in sight and made millions on their investments. That is because the market corrected itself.
Mortgage interest rates are rising at the moment. This does not mean that real estate is unaffordable. It does not mean that the real estate market is going to crash. Far from those dire predictions is the fact that real estate markets correct themselves over time.
Buying and holding is good strategy. Buying and holding and not being able to eat or not being able to buy clothes for your kids is not good strategy. There is a wonderful balance that can be reached. Utilizing hot market areas, where the rent will cover the mortgage and any other expenses involved with being a landlord makes real estate investment a low risk opportunity.
Professional management is the crowning touch for investing in real estate. It is mainly common sense strategy. Who wants to get up in the middle of the night to fix a stopped up toilet or to fix a broken heater? Not even the guy that gets paid for doing it likes that part of the job.
A management company does more than just maintenance. A management company will make sure you get your rent, by not only collecting it but will also make sure you have a tenant. Managing property is what they do and the only way they get more business is if they are good at what they do. You can rest easy with a professional management company because the usual landlord problems are solved by them instead of becoming a worry for you.
Article Source: https://www.bharatbhasha.com
Article Url: https://www.bharatbhasha.com/real-estate.php/51937
Article Added on Wednesday, November 15, 2006
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