Buying Profitable Investment Properties
When most people talk about building their portfolios, they usually talk about purchasing stocks and bonds. However, another way to build your investments is to acquire real estate. This is often a much more profitable venture than going into the stock market, but real estate also has its fair share of risks. With that in mind, there are plenty of ways you can go about acquiring the best investment properties for your ultimate goals.
First, you need to make sure you are comfortable doing basic repairs. If you only own one or two buildings, then you will likely be the one being called to handle anything that goes wrong. This can be anything from a toilet backing up to the lights flickering all the time. While it is possible you can send contractors to handle this work, you need to be mindful that these expenditures will eat into your overall profits. While some jobs may be out of your depth, you should at least be comfortable performing basic household tasks.
Additionally, in order for your investment properties to remain profitable, you should take care of any outstanding debts you have first. If you have student loans or medical bills that you still need to pay off, acquiring property at this time may not be right for you. It may also be impossible to get the financing you need if your portfolio is riddled with debt.
Before buying anything, you want to figure out what your operating expenses are going to be. This includes how much you will need to pay in property taxes and what utilities you need to handle. This will allow you to see how much rent you would need to charge in order to turn a profit. If the rent would be outstandingly higher than everything else in the area, then that property may not be ideal.
Finally, if you really want to turn a profit, avoid purchasing a fixer-upper as your first real estate investment. This might seem counterintuitive, but it is for the best. Fixer-uppers can generally be purchased for a low price, but you need to spend a ton of money getting them in working condition. This can really eat into your ultimate profits if you are not careful.
Remember that real estate is an investment. You are going to spend a lot of money upfront and will not reap the profits for several years. If you are willing to put in the time and effort, then looking into investment properties is a great financial decision.