Steps for a Successful Real Estate Investment

By: Jeffrey R.Kosnett: REALTOR® Magazine Online
Though rising home prices are making it difficult for investors to snap up properties and quickly rent them out or renovate and resell them at a profit, there are several steps they can take to ensure a successful investment.

Most investors sink their money into single-family homes, and their investments prove profitable if they can earn $100 to $200 more than what they are paying out each month. Given that positive cash flow is nearly impossible to achieve in overheated markets like New York City and Boston, investors would be wise to buy fixer-uppers in less desirable locales and take on most of the repairs themselves.

They should plan on owning the property for at least three to five years to recoup the investment. Those who expect to rent an investment property must decide whether to handle tenants, repairs, and other landlord responsibilities themselves or put upwards of 10 percent of their incomes toward paying a property manager to handle those tasks.

It is also important for them to perform credit checks on prospective tenants and avoid making a rushed investment decision.