With all of the TV shows regarding real estate flips and income properties these days, it seems that more and more people are finding an interest in real estate investment. But is it as easy as they make it look on TV? In my opinion, the answer is: Sometimes.
I once heard a great analogy that finding a good real estate income property is like finding the right blue chip stock. It's not something that is going to show you huge returns overnight, but in the long run, it will make you money. Location is extremely important and you also want to ensure that after all expenses, the rent you bring in leaves you with some positive monthly cash flow. Even if it's only a couple hundred dollars a month, it's better than nothing. That money should be saved and used to build a reserve fund for repairs, emergencies and upgrades to the property so that you're not forced to come out of pocket should those issues arise. You could go 5 years without having any issues, or you could have the furnace break down and the roof spring a leak within the first 6 months. Some things you just cannot plan for. However, with the right property, these issues will be overshadowed but the great monthly profits you make, let alone the fact that someone else is paying off the mortgage, all while the home (in it's sough after neighborhood) continues to grown in value.
So you may be wondering, well how will I know what properties are good and which ones are bad? Get a REALTOR who knows the area, knows how to handle and structure deals involving rental properties and will help you crunch the numbers! Ultimately in the end, the decision is yours, but a good REALTOR can help you sort through the clutter and make sure you are armed with the right information before pulling the trigger on that first income property.