.svg)
Investing in rental property can be a fantastic way to generate passive income and build generational real estate wealth, but there are some pitfalls to avoid.
Consider these five tips before making a real estate investment:
Identify Goals
Be certain of your short-term and long-term investment goals and only purchase properties that align with that purpose.
Location
Location is arguably the most critical factor in any property investment. Check with the municipal planning department to identify potential growth.
Cash Flow
An investment property should generate more income than its total expenses. Calculate the project’s net operating income (NOI) to ensure profitability.
Value Appreciation
While short-term cash flow is important, long-term appreciation is how wealth is built in real estate. Research local market trends and job growth to predict future value.
Condition
Get a thorough inspection by a licensed professional to identify structural issues or major repairs like roofing or major home systems. Significant repair costs can erode profits and reduce your return on investment (ROI).
