Investment Properties

How to Make Good Money with Investment Properties

Investment properties are real estate structures that people purchase with the intention of selling them at a later date for a significant profit. Real estate investment opportunities are considered to be a win-win situation by many because of the ability to purchase a property and then simply collect rental money thereafter. However, real estate is more of a long term investment as this type of investing often requires a large capital sum to begin with.

Investment properties are growing in popularity for those who are tired of the instability of the stock market; however the decision to become a landlord invites its own set of financial and personal issues. Finding an investment property should take time and be thoroughly researched before being purchased.

In real estate much depends on the investors’ ability to foresee the future somewhat, in regards to what the future of the location will be, who will be moving in and moving away and what the general economy will look like down the road. It is possible to a profit, sometimes a significant one, on an investment property in a poor area if that area eventually sees growth and attracts wealthier residents, however the opposite effect can also happen – investing in a property in an area that eventually declines and sends the value of the property plummeting and causing the investor a significant financial loss.

Over time, the longer an investor holds onto a property, the more it will cost to invest in maintenance, repairs and improvements. However, if an investor only plan to hold onto a property for a short period of time before reselling, the amount of investment put into maintaining and repairing the property will not be as significant. Unless there is a guarantee of a significant profit, repairs and other maintenance costs would not be a financially sound move for a property that will soon be resold.

The best advice for owning investment properties is to invest planning to hold on for the long-term. This way, the investor will not be subject to downswings in the market and may make a greater profit over time. Investment properties may bring in supplemental income, however unless there are enough properties owned by an individual, there will often not be enough of a significant profit to make being a landlord a full-time job.

A New Day Job

Property investors who want to go into the market full-time will need to amass a collection of properties – enough to being in a livable income from rent payments. This means hunting for properties that will attract renters and pay off over time. There are many ways to find investment properties such as from foreclosures or friends in the business – real estate, banking etc – that can provide information about the potential sale of a property. There are also a number of property owner’s groups that may be able to provide opportunities for and information about potential investment properties. Sometimes it is even possible to approach a current owner and discuss their interest in selling the property.

Before Investing

As mentioned, investment properties often require s significant amount of cash upfront, and likewise, it is smart to have financial resources ready in the event that a property comes with any substantial unforeseen costs.