Making Great Real Estate Investment Work for You
Real estate investments should require you to make upfront choices when planning to purchase investment property. This is because when trying to look into investing with properties, you have to earn wealth on the basis of the risks that you are going to take. This should be done while you minimize the time spent on attending to that particular property. Here are optimal scenarios that you can get as close as you can with your own goals.
Paying on Fair Cash-on-Cash Returns
Take note that when you buy property, you are using money from your liquid financial assets. This means that you are taking it from stocks, bonds, and other liquid assets then you are going to invest it into a very illiquid asset which is real estate. More so, you used to earn a steady rate of return from your financial assets like 4-6%, in which you need to strive to earn a fair cash-on-cash rate of return from the real estate investment. You can achieve this by buying cash flow-positive properties in which you can earn decent returns.
Making Lower Risk Real Estate Decisions
Take note that real estate risks are extremely high. Compared to simply purchasing an established cash flow investment property, profiles with higher risks include the development of land, real estate, private real estate funds, tenant-in-common investments, and fixer uppers are just a few of them.
Choosing Investment that Does Not Require Too Much Management Time
Vacation rentals, college rentals, and low quality properties in unideal areas are just examples of areas that would require too much management time. In contrast, you can opt for decent credit profile renters for your boring properties. This should be the key in making investments that should only take a bit of your management time.