Surprising as it mean appear, though "location-location-location" actually is true when buying a home, it may or may not always be factual when purchasing investment real estate.
It makes great sense that a homeowner would be strongly influenced by the location of a property in which to live and bring up a family over others. But this is not essentially so with rental property investment. In actuality, real estate investors usually buy properties in areas they might not otherwise wish to live themselves.
This disparity over this golden rule of real estate linking homeowners and investors has a simple explanation. Whereas, a homeowner has a normal regard for all things that affect the family's well-being, an investor alternatively doesn't normally occupy the property. So they aren't anxious by the position of the property, especially in situations where the investor lives outside of state and may not even see the property they bought.
The most important truth regarding real estate investing is the end result. How does the rental property profit the owner? Does it offer return on investment cash flow, tax shelter, and appreciation? In other words, will the real estate investor earn money if he or she spends in the property, and how much will be profited?
Of course, that's not to say that position has no power on investment decisions. As a real estate investor, you should always research on normal trends of the area and get an impression for the direction in which it is heading. You obviously would not wish to purchase a rental property in the worst area of town (and for that matter, even in the best part of town) unless all indications are that the property will appreciate.
You might also have pause to invest in a location where there are excessively low occupancy levels or rents. It goes without saying that you do not to invest in a building that may, by its very postion, remain mostly empty or does not have the capacity to demand substantial enough rents to make your cash flow requirements. - 31904
It makes great sense that a homeowner would be strongly influenced by the location of a property in which to live and bring up a family over others. But this is not essentially so with rental property investment. In actuality, real estate investors usually buy properties in areas they might not otherwise wish to live themselves.
This disparity over this golden rule of real estate linking homeowners and investors has a simple explanation. Whereas, a homeowner has a normal regard for all things that affect the family's well-being, an investor alternatively doesn't normally occupy the property. So they aren't anxious by the position of the property, especially in situations where the investor lives outside of state and may not even see the property they bought.
The most important truth regarding real estate investing is the end result. How does the rental property profit the owner? Does it offer return on investment cash flow, tax shelter, and appreciation? In other words, will the real estate investor earn money if he or she spends in the property, and how much will be profited?
Of course, that's not to say that position has no power on investment decisions. As a real estate investor, you should always research on normal trends of the area and get an impression for the direction in which it is heading. You obviously would not wish to purchase a rental property in the worst area of town (and for that matter, even in the best part of town) unless all indications are that the property will appreciate.
You might also have pause to invest in a location where there are excessively low occupancy levels or rents. It goes without saying that you do not to invest in a building that may, by its very postion, remain mostly empty or does not have the capacity to demand substantial enough rents to make your cash flow requirements. - 31904
About the Author:
Jason Myers is a professional writer and he writes mostly about real estate investing news. He's also interested in real estate investing in the us.
