What's The Right Kind Of Investment Property For You?

By Author: Alexandria Anderson
Total Articles: 46
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Part of learning how to get started investing in real estate is determining what type of property to look for. There are many options to choose from. The investor can buy houses, duplexes, condominiums or apartment buildings - and that is just the beginning. He/she can buy lots and build investment property or buy lots and rent them outto renters who then build on them. He/she can make in really good shape a part of their research criteria, or he/she can search for something that seems to be in rougher shape than it actually is, in order to get a good price. He/she can go after owners who are facing foreclosure with the hopes that they locates someone who is trying to put their property out of their mind so that they can just be rid of it.

There are many possibilities. Which property is the right property for you?

Ultimately, the right property for you is the one that is going to generate the most money while not costing you an arm and a leg to be rented out. Getting a property ready to rent may involve renovation to bring a building up to code - adding up-to-date appliances and such. It may involve a new coat ...
... of paint, or even getting rid of some undesirable tenants. What the potential new buyer has to determine is, if the building's problems can be repaired.

For example, in his book Ken McElroy in his book The ABCs of Investing, writes about a person who had bought a building without even viewing the site, and found himself stuck with some tenants who who were bad and dangerous The building was in a bad area of town in which the owner should never have purchased a property. When he finally got around to hiring McElroy's property management company, he had already lost a great deal of potential income due to over due rental payments.

McElroy's team fixed what they could. Got rid of the undesirable tenants and hired security for the building, but they could do nothing about the quality of the neighborhood. The building would never be one that people with a lot of choices would want to live it, simply based on its location. It would never get the rent that it would have if it just had been situated somewhere else. Most of the building's problems were just un-repairable.

The old saying, Location, location, location is important for a reason. Location may be the single biggest factor the real estate investor should think about when looking at potential investment properties.

Besides basic viability, an investor must think about how they want to go about handling their investments. Mr. McElroy recommends that investors contract a property management company for the experience and to free the real estate investor to look for additional investments, but some investors just like managing their property by themselves. This type of person should think about buying property that is small enough to manage on their own. Some people are unwilling having investors or partners and so will be restricted by that as well. When this is the case, less expensive and smaller is usually the best option for them.

In the end, Mr. McElroy also recommends investors not assume they should start small. If they have learned enough to buy investment property in the first place, they can learn how to work with other people's money. He/she should think about, however, what he/she is capable of - or what they would consider the most favorable approach. The possibilities are almost infinite.