Investment Properties - What Kind Should You Buy?
By Alexandria Anderson

When you are deciding what parameters your target real estate investment needs to have, you don't need to rely entirely on someone else's requirements. Use your own financial goals and needs for determining what to look for. However, it may help to consider the things that are also important to other people.

For example, Ken McElroy, author of "The ABCs of Real Estate Investing," prefers to buy properties of "substantial size," so that they will pay for the hiring of a property manager. He simply does not wish to play that role. It would most likely be a waste of his resources to do so. By hiring a property manager, he is able to be out looking for even more properties, to make even more money.

Another thing that we all should consider is whether or not the property is going to require extensive renovation. McElroy refuses to consider properties that are too old. Even if such a property were in good shape, which is usually unlikely, it will probably be missing some important features. You will not be able to charge as much rent as with other properties. You will have to spend more time and money getting the investment up to speed. Why bother with rental units like that when, with just a little more effort, you can find a property that needs less repairs and will bring in more rent?

Remember how vital the location is when thinking about real estate. When deciding upon your sub market, remember that the majority of people would rather buy than rent. So, unless it is a lot more expensive to buy in certain areas, you will have a difficult time finding and keeping tenants.

McElroy also likes to target out-of-state owners who own only 1 or 2 properties in a particular city. Many times these owners do not keep their properties up to the level at which they could function, because they originally underestimated the amount of time and effort it would take to nurture out-of-town investments. Sometimes the owners are very happy to let someone take their properties off their hands.

No matter what kind of deal it appears you will be able to arrange on a given property, be careful you don't buy something at a "good" price if it is in a undesirable location. Remember, the only reason you are purchasing investment property is so that it can make you money. If it is not going to generate income, then NO price is a good price. It is not going to make money if it is in a dangerous neighborhood. It is not going to make money if it is in a community with a high unemployment rate. It won't be making money if it is in an area that everyone is moving OUT of. If there are no people, there won't be any renters either.

These are really just a few qualities that an investor should consider when researching potential properties, and they will help you on the road to discovering what exactly you need in a property for investment. Your focus is appreciation and cash-flow. Look for real estate investments that are in good condition and well located. Make sure they are where the people are and where they want to be. If you keep these things in mind, everything else will work itself out for you.

Alex Anderson Is A Licensed Realtor Who Assists People In Finding Affordable Investment Property Sales, As Well As Helpful Property Investment Advice On How To Rent And Manage Your Property For Cashflow, Appreciation, And Tax Benefits. Visit http://www.GreatInvestmentProperty.com For A Free Copy Of "The Investor's Rental Guide".

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