There is a lot to think about when you are buying investment real estate and knowing the pitfalls and details can make all the difference in the world.
Let's look at purchasing a home for income first and see the details. Buying a home in a good area can get higher rents. For example we get between $1100 2 bedroom and $1300 3 Bedroom in certain areas. The net proceeds after taxes, insurance and property management is very attractive.
The other detail that you need to look at is the equity position of the home and the equity trend in the area it is located. We purchase homes in areas where the equity trends are going up. This gives the investor the option to sell the property if and when they want.
Example I sold a home for a client we purchased in 2019. With their income from the rent and the nice equity position that grew during the time they rented it, the client made a lot of money on this property. The home was in a nice area and there were a lot of home buyers wanting that area to live in.
I have sold homes for investors that did not purchase in good areas where the equity is trending up. They lost money and their tenants quit paying rent. Remember that saying you get what you pay for? In real estate you do not want properties like this. These types of properties create stress and headaches. It also does not help your pocketbook.
Multi Family real estate can be good if the property is in a really nice area. That being said it is so crucial for the multiplex properties to be in a great area.
I am assisting a client in leasing some multiplexes and there are two of them. One complex is in a very good area and they will make a ton of money on both income and equity. The second property is not in a great area, not horrible, just not where I would purchase. The equity and buyer pool shrinks a lot with these types of properties.
The key is the location and how much money you want to invest. Homes have less maintenance and more people that need to lease and purchase.
Multiplexes require more money and higher maintenance costs. There are also less people buying them than homes.
That is why as an investor you need to look at all the details of any real estate before you purchase.
Call me (Brett) 216-703-5740 Fathom Realty or Text "Success" to +12164555264
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Thank you