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Published On: Fri, Jul 31st, 2015

The Investment Equation for the Budding Real Estate Entrepreneur

There are few things that are certain in life, but the fact that property holds its value is certainly one of them. Even though we’ve only just seen the back of a financial crisis, not many people would disagree that one of the few concrete investments surrounds real estate.

You just have to ask Steve Liefschultz, the CEO of Equity Bank and a man who has coined in millions of dollars through shrewd real estate investments. He has penned several online articles that offer exact guidance to ‘beginners’ and using this information we’ve put together this guide.

While there is never going to be an equation that nails real estate down to a tee, there are certainly some factors out there that increase the chances of successful investment no-end. Therefore, if you are on the verge of investing your life savings with the hope of multiplying them, sit tight and read some of the things you should be looking for as you bid to start your property empire.

Where is it located?

It might be a cliché, but ‘location, location, location’ really is evident when it comes to property. It’s not just to occupiers either; investors need to be especially wary of the location of a property if they are serious about cashing in on it.

The general rule is that if you wouldn’t fancy residing there yourself, it might be better to turn in a different direction. If there are going to be obvious issues regarding the local crime rates, the last thing you need is to regularly be funding repair work. At the same time, the location doesn’t have to relate to obvious problems – it could be something as tiny as the type of soil which might make subsidence a problem in the future.

What are the obvious risk factors?

We touched upon a few risk factors in the previous paragraph, but you should also be looking for those blatantly obvious risk factors. Does the property look utterly dilapidated? If so, you’re about to burn a big hole in your pocket in terms of repair work if you opt to invest in it.

photo Alina Ku-Ku via Shutterstock

photo Alina Ku-Ku via Shutterstock

New properties unsurprisingly have far fewer maintenance issues attached and this can preserve your investment somewhat. Some investors like to play close to the line and find a property that isn’t completely perfect, so they can improve it and ultimately reap more rewards in the future. However, for the beginner, we’d recommend sticking to the safe, no-risk approach.

What is the time investment going to be?

So far we’ve spoken about your financial investment, but let’s not forget the small issue of time. The old example of a bad area comes into play again, and you will most likely have to invest much more time in this property than one in a better area. Other examples include college rentals or vacation rentals – both of which often require significant amounts of time from the owner.

As we all know, time is money for the budding entrepreneur – so make life easier and cheaper for yourself by opting for a ‘boring’ property that isn’t going to steal all of your precious time.

Guest Author: Lolita Di

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