Rental properties 101
With the volatility of the stock market, many people are opting for investing in rental property as a conservative addition to their portfolio. Some investors are finding it to be not only less volatile but also a very profitable investment. Beginner investors should research any type of investments that they aren’t familiar. And of course, new investors should talk to their tax professional to understand all of the pros and cons of any investment that they might consider. With that said, there are some rental property basics to address:

Understanding Cash Flow: The first step is to understand the concept of cash flow. In simple terms, cash flow is calculated by subtracting the housing expenses (mortgage payment, property tax, insurance, and upkeep expenses) from the money that is received from the tenants per month. Positive cash flow (cash flowing) is when the received money is more than the housing expenses; whereas, if the expenses are higher than the generated income from the property, it is called a negative cash flow.

Choosing Rental Property: This is the most crucial part of investing in rental property. You can opt for single or multi-family units, retail, and commercial properties. This is where a real estate professional who is knowledgeable in your target market is KEY to your success.

While searching for our clients, Your Solutions Team agents look for highly functional properties in locations that are in high demand at a price that will “cash flow”. This assures the property owner an excellent chance in finding good tenants that pay top dollar. A property in a good location is also easier to sell if liquidation is ever needed. As an added bonus, finding a property that is in a distressed state can sometimes bring a good equity position to the property before a tenant has even moved in.

For more information and a free consultation on rental property investing, email: Invest@YourSolutionsTeam.com