| | The Other Side of Real Estate
While some investors do well with investment real estate, success is not guaranteed.
Often we hear a new investor say with a sense of excitement, “my rent is enough to cover my mortgage, taxes and insurance.”
That investor is overlooking other expenses, for example: carpets wear out, units need to be repainted from time to time, then a big one like the heating and air system needs to be replaced and the lost revenue due to vacancy. Cost of these has to come out of the investor’s resources since the property cannot sustain it with its own cash flow.
So how do you defend yourself?
1. Do your homework-see download below
2. Do not over leverage your property: Consider putting more cash upon acquisition.
When buying a property it is wise to have it inspected by a professional and then buy a home protection plan on the property to help with major challenges.
At best when leveraged out, real estate is a wonderful estate builder. Expecting to receive cash flow when one is highly leveraged is unrealistic.
Downloads - Click to View:
Property Analysis - Excel Version
Property Analysis - PDF version
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