It is quite common for investors to own multiple pieces of real estate, one of which serves as a primary residence, while the others are used to create rental revenue and profits through value appreciation.
Investing in real estate can be very tricky at times. Most investors want to earn a return on their investments (obviously), based on the risk and the time that is required to keep the property. Recently, A Forbes article highlighted three factors that can make or break a real estate investment:
#1. Pays a fair cash on cash return
Real Estate can be converted into cash fairly quickly, which makes it a very liquid asset. However if you’re not going to get a lot more income than the amount of cash you invested then you probably should keep your cash in your pocket or invest it in something else. It’s basic business sense. The thing with real estate though, is that it is particularly volatile and you will need to be a savvy investor to make the most profitable moves.
#2. Isn’t too risky
To reduce risk, you must perform the proper diligence, thoroughly analyze the property, review historical reports and consider taking a fee simple label for the property in your own name or in the name of an object you own.
#3. Does not require a lot of time
Some properties may require too much time and maintenance to make them an ideal investment. It’s clear that the time required for managing the investment can be costly whether you invest in a small business, real estate, or other direct investment.
The chance to capitalize directly with experts in owning and managing businesses is available now. Spreading with funds is less risky with a recognized partner who has a solid business plan.