Tuesday, September 20, 2011

The Downside to Real Estate Investment - Wholesale Real Estate ...

The Downside to Real Estate Investment

Wholesale Real Estate Coaching: Real estate investment is by far still one of the best things you can do to create wealth. If you buy houses cheap on this boom market for buyers and resell them later, you will most likely make a nice profit. If you buy houses and rent them out until it?s time to sell, that?s even better. You?ll be earning a nice monthly cash flow while you are waiting for the seller?s market to improve.

What could be negative about that? Not much if you do everything exactly the way it should be done. The trick for new investors is knowing everything there is to know about buying, repairing, renting, and selling a house. It takes years and lots of experience to get all of that figured out. One of the worst parts of this equation is picking tenants that will ruin your perfect plan in a heartbeat. When tenants are either picked without proper screening or are simply rented to because you need to start getting a return on your investment so you can pay the mortgage, there will be trouble at some point in the game. A stroke of luck in this case would be the only thing protecting you from a bad tenant experience.

?It takes years and lots of experience to get all of that figured out. One of the worst parts of this equation is picking tenants that will ruin your perfect plan in a heartbeat.?

A tenant that doesn?t pay the rent on time and every month can throw a monkey wrench into the works. The idea of renting the property out is to help you pay the mortgage on the investment property until you can sell for a decent profit. If you?ve decided to use rental properties for monthly cash flow income, you also need good tenants. Other problems with tenants can be even worse than nonpayment of rent. If your tenant causes police to be called to the property, annoys the neighbors or worse, or does things to get you sued, this investment will become a burden and an expense instead of a profit machine.

Carefully and lawfully evicting a tenant is your only choice in most cases. Don?t skip the lawfully part by any means and no matter what the situation. You could be sued by the tenant that didn?t pay rent, damaged your property, and caused nightmares for the neighbors if you don?t follow the letter of the law in the eviction process. Each area has its own specific rules so be sure you know what those laws are before you choose your tenants.

Tagged with: Buying Investment Property ? Finding Rentors

Filed under: Wholesale Real Estate Investing

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Source: http://www.wholesale-real-estate-direct.com/investing-tips/downside-real-estate-investment/

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