Real estate investing can take on many forms
Real estate fixer-uppers have a simple formula for creating profit. The property owner adds value by doing a renovation. Buy a physically distressed property below market value then fix it up to market standards and sell at a profit. Simple plan, but hard to execute. But if it is done right flipping fixers can earn the investor a nice profit.
A basic rental property is a tried and proven from of real estate investment. Simply buy a property and rent it out to a tenant. The property owner or landlord is responsible for paying the mortgage loan, property taxes and costs of maintenance. Preferably, the landlord charges enough rent to cover the costs of the property. Or the property owner may also charge more in order to produce a monthly profit. Or charge enough rent to cover expenses until the property rises in value to sell or more long term pay off mortgage and have a property free and clear.
Multi-family residential property usually provides the most stable returns by nature of more units to rent within a single property. A Multi-family residential property can help mitigate lost income because each tenant is on a different point in their lease or time renting.
Not all real estate investment works out. There can be a bad tenant who does not pay and damages the property. Or no tenant at all which creates a negative monthly cash flow. Real estate investing can be very profitable. And with the ability to use retirement money in accounts like a 401k, creates the ability to buy real estate with no loan. This removes much of the risk.
What type of investment property should a real estate investor buy? Maybe a condo with some of the maintenance taken care off of single-family home? Talk with real estate investor realtor Dan Parisi and crunch some numbers and see what type of investing is right for you.
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