Investment strategy
(by Eric [TX])
December 10, 2000 12:27:02 
RE: Investment strategy
(by John [Oregon])
December 10, 2000 12:58:58
RE: Investment strategy
(by Kelly [Md])
December 10, 2000 14:38:20
RE: Investment strategy
(by Eric [TX])
December 10, 2000 15:15:07
RE: Investment strategy
(by Dusty [oh])
December 10, 2000 19:41:24
RE: Investment strategy
(by Tom [Indiana])
December 10, 2000 20:36:46
RE: Investment strategy
(by Ray J [Ohio])
December 11, 2000 09:08:42
RE: Investment strategy
(by Dan A [MA])
December 11, 2000 09:43:04
RE: Investment strategy
(by Glenn [NJ])
December 11, 2000 12:41:21
RE: Investment strategy
(by Glenn [NJ])
December 11, 2000 12:45:05 | I was wondering what investment strategy is the best. When buying investment property, is it best to have income as a goal, or equity. For example, should I buy a lot of good property and try to pay it off asap, or try to generate income with the property? 130.164.146.81 |
| Eric - What's your goal? Without that, and your market, can only guess at what might be your best strategy. In general, real estate has opportunities for appreciation, tax shelter, income and certain other benefits. If your goal is to maximize assets, you should buy with the least amount of cash and sell or exchange anytime your equity doubles, using tax advantaged methods. If your goal is income today, you should flip properties or only acquire cash cow properties. If your income objective is for money later, then, pay off the mortgages quickly. Again I don't know what your resources or skills might be or your market so can't suggest any specific strategy. This is probably something only you can do for yourself. 4.54.69.163 |
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My advice is: Don't worry so much about making lots of money really fast. Instead, find out what you like to do and become really good at that. If you like sales, become a realtor, like dealing with tenants, become a landlord, like working with your hands, fix-up and flip properties. Don't like any of those, try something else. When I gave this same advice to a friend, he said he liked money (having and making it), yet there are many different strategies for making money (in and out of real estate), but if you don't like to path you're taking to make the money, you won't keep with it. 208.205.186.34 |
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My goal would be to increase my net worth slowly. I have a good stable job that I want to keep, but I believe that the best place for my "extra" money is in real estate. My wife and I are wanting to buy a duplex in the near future, and eventually accumulate some more property. I think it is good to have a few rules of thumb when evaluating properties, and I was wondering what to look for. For example, I would think that rent versus mortgage payment would be quite important. I've also read some books that say don't buy something if the rent doesn't cover the payment. I plan on investing for the long term, so I guess I am the kind of person that will not do much flipping, but rather buy buy and hold strategy. When you evaluate a deal, what are the first few things you look for in a property? Thanks for your time. 24.93.48.95 |
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Find yourself a nice, sturdy building at a decent price in a good location. Run all the figures on the property (mortgage, insurance, utilities, etc...)and investigate the rents in the area so that you know what kind of income the property will bring in.I hold a piece of property that rents for $600 a month. My monthly mortage is $400 which includes taxes and insurance. provit is $200 a month. I would never purchase a piece of property for equity only. My personal goals require a monthly return. I need the dollars to make other investments. Not to mention the fact that I, the property owner, am responsible for the major upkeep of the property. Might as well let the tenants pay for that too. 205.188.197.161 |
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Eric, Whatever you decide to do, remember to diversify. If you want to buy real estate, go ahead and buy real estate, but also buy some stocks every month or every quarter also. Also buy some precious metals. Also buy dinner at a nice restaurant once in a while for you and the significant other. These latter pay immediate dividends, which are just as important as long term dividends. So don't get tunnel vision. 208.15.189.89 |
| Hi Eric, all of the advice given was good. I would not purchase a piece of property for potential equity. Depending upon where you buy and your clientele there is a certain amount of work that is involved with managing the properties and I don't want to work for free. Also you need money to cover repairs and I have yet to purchase a property that did not need some type of repairs that need to be done, some more expensive than others. If you ever needed to make a job change then you would want your rental income to cover your mortgages. At times you might have a vacancy so the money that you made during 100% occupancy can help you during a vacancy. Cashflow is good. Also when you are looking to buy more properties and if you are going to finance them then those financial institutions will be looking at your current properties to decide if your debt to income ratios are within their guidelines. I think most banks will give you 80% rental credit. Good luck. 198.80.62.10 |
| Good cash flow can compensate for a multitude of mishaps/mistakes a beginner will make. Poor cash flow in combination with honest mishaps/mistakes will result in forclosure. 207.138.153.34 |
| The best advise that i can give you when buying the first rental is to buy something in a very good neighborhood. You will have better tenants and it will give you a chance to start and accumulate some appreciation which you can use later on to finance other properties. As far as cash flow if it is your first you can do some work without getting money in return at the beggining. You do need to make sure that the house will pay the mortage as negative cash flow is never good, but great cash flow is not need if the house is in a great neighborhood. 198.177.229.155 |
| I bought two properties in 1999 in GREAT neighborhoods and the price of the house has gone up 15% this year. Capital appreciation is GREAT reward in the beginning, IMHO. 198.177.229.155 |