The 3 Most Important Things To Know When Investing In Positive Cash Flow Property
There is A LOT of information circulating out there when it comes to the topic of investing in real estate, but is it all valid to you?
The answer, in most cases is NO. Yes, the latest interest rate rises would be classified as valid information but a lot of the stuff circulating out there are minor details that can be learned along the way, or things that are only relevant to certain areas and not relevant to your specific investments.
Below is a short list of what I believe is the information that matters:
1. How To Succeed With Your Plan
There are 1001 ways to make money with real estate, but it is almost impossible to take advantage of all of them. There is renovation, development, subdivision, positive cash flow, negative gearing, dual residency, building units or town houses, flipping properties, seller finance and the list goes on and on and on and on.
One of the most important pieces of information you can get your hands on is how to succeed using your defined strategy. If that is investing in positive cash flow properties then read up on everything to do with that, if your plan is to buy, renovate then sell then read up on that. There is no point reading up on development if your plan is to just buy and hold positive cash flow properties. Sure this may be of use in the future, but if you don’t have a lot of experience yet then it might be a better idea to learn all about your plan first before you learn about other investment strategies.
2. The Area You Are Investing In
There are a lot of magazines and websites that will talk about the market sentiment of the nation, or of individual states, and while that has some relevancy it shouldn’t define your decisions. What is more important is to look at and research the area you are investing in.
Is the area made up of families or younger people? What do people want from a rental property in the area? It is a growth area or is the area in decline? Is there housing commission in the area and if so where? etc etc.
Knowing the area you are buying in is extremely important. The more you know about an area the greater your chances of success will be.
3. The Property You Are Investing In
Lastly you need to know about the property you are investing in. I always get building and pest inspections before buying a property. This is to ensure that I know exactly what I am getting.
I have seen too many new investors buy properties without the proper inspection only to find out later that they bought a dud.
Do everything you can to know as much about your property as possible before you buy it. Get the proper inspections done and inspect it a few times yourself.
There is a lot of information out there about investing in positive cash flow property, but knowing how to succeed with your plan, knowing about your area and knowing about your property are 3 of the most important things to focus on.
If your plan is to invest in positive cash flow real estate (real estate that generates more income than you pay in expenses) then I suggest you join our mailing list by going to the sign up page or you should buy and read From 0 to 130 Properties in 3.5 Years, Second Edition by Steve McKnight.