Are You Buying Low Risk Property Investments?
Have your ever felt like you are drowning in a sea of information? Living in the information age, we have so much information available to us at our fingertips. As cool as this is, it is also a curse since it actually has stopped many people from taking action and making investments. All too often I talk with people who get confused and literally shut down. They continue to read about all the different investment options and actually start to lose clarity instead of gaining clarity. This of course is followed by lack of confidence and then finally giving up.
Focus on what you want
When you focus on what exactly you want to invest in, you will learn to only read and learn about properties and investments suited for you. All the other information should be irrelevant to you. This focus will keep out all the noise and bad information that is not really relevant to your investing strategy.
If you have found yourself losing this focus, perhaps you also are missing the big picture plan of what you want from your investment.
Talking with investors every day I often find this to be the challenge. I suggest that the best way to start gaining clarity and is to create a written real estate investing objective, identifying what you want to invest in and where you will invest.
I also suggest starting with low risk and highly sustainable investments. Once you build confidence up and have at least 3 investment properties you can venture off into different investments. I have found that investors who have 3 (seems to be the magical number) are much more confident and understand where exactly they want to take their investment portfolio.
What is a low risk property?
An investment that reduces the element of surprise is a great start. Investors' biggest concerns are making sure they secure great tenants and can get the cash flow they desire with the least amount of headaches. The best way that I have found to accomplish this is by investing in a performing asset.
In short, a property that is already rented out collecting rent. The asset (the house) is performing. This totally reduces and even eliminates the unknown. When you buy investment property that is already used as a rental property, you are really buying a small little business. You now know on day one what your expenses and what your income is, and therefore you know what the property truly will generate in the form of cash flow. With all this clarity you have a low risk property (also known as a turnkey real estate investment).
What is a highly sustainable investment?
A property that is located in an emerging market is your most highly sustainable investment. This means the market location has:
- Job growth
- Job diversity
- Population growth
Undervalued markets: (In short it takes less than 3 years of the area’s median income to pay for a median price house)
Controllable expenses: properties such as a single family home where tenants pay all utilities and lawn care. As an owner your expenses are fairly fixed.
When you combine low risk and sustainability you have a predictable investment worth owning. Obtain a number of these and you have an incredible investment portfolio.
Want to hear about turnkey real estate investment properties and notes like these that are available, join the Equity Builders Real Estate Investment Buyers Group TODAY!