The Portrait of a Typical Investment Property (It may be different than you think!) 1/1/2013

When it comes to real estate investing, there are a lot of misconceptions, especially where investment properties are concerned. Too often, real estate investments are associated with one of two extremes: run-down properties to be rehabbed and resold or exclusive, resort-like vacation properties.

While some do invest in properties like these, the portrait of the typical real estate investment property is much different. The following are a few statistics that represent average investment properties:

    · 75% of investment properties are in small towns and rural or suburban areas

    · 48% of investment properties are within 20 miles of the investor's primary residence

    · 57% of investment properties are single-family, detached homes

    · 92% are not resort properties

As you can see, the average investment property is a single-family home purchased near the investor’s primary residence. The reality is, there are properties with great investment potential in nearly every market. You simply need to know what to look for when searching for properties.

For most real estate investors, the primary consideration should be a property’s ability to generate monthly cash flow, or the amount of income (in the form of rent payments) remaining after expenses and mortgage are paid. By investing for cash flow, a property will earn money every month, even when not appreciating. This ensures your investment will continue to be stable and lucrative.

Earning cash flow on a property has many benefits that you simply don’t find in other investment options: you maintain control over how the cash is used, you can increase cash flow by cutting expenses or raising rent, and you earn consistent and secure income month over month, to name a few.

If you’re considering investing in real estate, begin by thinking about your preferred investment areas. Focus on areas near you that you’re familiar with and that have home prices within your budget. Once you’ve narrowed it down, contact a real estate agent who specializes in working with investors, such as a Certified Investor Agent Specialist (CIAS).

A CIAS designated agent has the skills and knowledge to assess properties based on your specific needs and wants. He or she can provide you with an analysis of a property’s cash flow potential and guide you through the entire investment process.


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