And that’s not a problem. Investing in real estate is one of the few ways where you can invest for BOTH long-term capital gains and cashflow. IF it’s not managed well, the returns you will get when you dispose of the property can only be a return of the money you put into the property over the years, if the price kept increasing.
How do you make that purchase that is both profitable now and in the future?
Evaluating a property for long-term or short-term rental potential requires looking at a few things, starting with the market. This is where personalized financial advice is more important than the “general” real estate marketing tools. From experience, I can tell you there are many differences one block can make. You can read that certain type’s of cities are good, or look for a property you would rent and an area you would live in. Then there are others that will tell you the exact opposite.
Honestly, they can both be wrong and right at the same-time. Your risk profile matters in making a decision on where within a market to buy. Financially you maybe better suited to buying a property in the more expensive side of town, but that doesn’t mean it needs to be any lower profitability. There are different types of rental strategies you can take to improve the efficiency of your rental property regardless of cost.
Another great piece of advice is to buy a multi-unit and live in one unit, so you can take advantage of leverage available to home buyers purchasing a property. This may not work, if you’re like me and more of an introvert:) You may not be interested in having conversations with your tenants about their day and having a close view of how they are treating your property.
THAT doesn’t mean the strategy won’t work for you. It just means you have to find ways to structure your property and management to fit your comfort.
The difference a third party opinion can make when reviewing your real estate investments can be the difference between waiting for the day you sell, to finally realize a profit.
Connect with us to learn more about how we can help you evaluate your real estate investment to fit YOUR rich.
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