What Is The Best Kind Of Property To Invest In?

An important part of learning how to invest in real estate is figuring out what kind of investment property to go after. There are many different choices. An investor can purchase duplexes, condos, apartment buildings, or even houses - and that is just the beginning. They can purchase lots and build investment property or purchase lots and rent them to people who build on them. They can make “in very good condition” a part of their research criteria, or he/she can look for something that seems to be in rougher shape than it actually is, in order to get a good deal. They can hunt for owners who are facing foreclosure in the hope that they locates someone who’s hoping to put their property out of their mind because he/she really like to be rid of it.

There are many possibilities. Which property is the right property?

Ultimately, the right investment property is the one that will generate the most money while not costing you an arm and a leg to get up to speed and run. Getting a property ready to rent may involve renovation to bring a building up to code – adding up-to-date appliances and such. It may involve a new coat of paint, or even evicting some undesirable tenants. What the potential new buyer has to determine is, if the building's problems are fixable.

For example, in his book Ken McElroy in his book “The ABCs of Investing,” writes about someone who purchased a building without ever visiting the site, and found himself saddled with several tenants who who were bad and dangerous The investment property was in a bad area of the city where the owner should never have invested in a property. By the time he got around to contracting Ken’s property management company, he had already lost a great deal of potential income because of over due rental payments.

McElroy's team repaired what they could. They got rid of the undesirable tenants and hired security for the building, but they could do nothing about the quality of the neighborhood. The building would never be one that renters with other choices would choose to live it, based simply on its location. This property would never command the rent that it could have if it just had been situated in another area. Most of the building's issues were simply un-repairable.

The well known adage, “Location, location, location” is very influential for a reason. A property’s Location may be the single biggest factor the real estate investor needs to consider when searching for potential investment properties.

Aside from simple viability, the investor needs to consider how he/she wants to manage their properties. Mr. McElroy recommends that investors contract a property management company for the experience and to free the investor to seek out more investments, but some investors simply like a more hands-on approach. That kind of person might want to consider buying property that is small enough for him/her to take care of on their own. Other investors are unwilling working with investors or partners and will be restricted by that as well. In that case, smaller and less expensive is usually the way to go.

However, Mr. McElroy also advises that investors not assume that they should start small. If he/she has learned enough to buy investment property in the 1st, they can learn how to use other people's money. They should remember, however, what he/she is capable of - or what they would consider the easiest way to move forward. The opportunities are, after all, almost infinite.

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Alex Anderson Uses The MLS Listings Minnesota To Locate Homes For Sale In Minneapolis. Download A Free Copy Of "The Investors' Rental Guide" At www.GreatInvestmentProperty.com

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