Rental real estate investing is a lot more complicated than simply picking out a property at a good price, purchasing it, finding a management company to take over the day to day operations, and then sit back and peruse the positive cash flow.
Instead, you will find that the rental market is finicky and that there is only one sure thing in rental real estate investing: change! Areas that are considered hot and booming today, could quite possibly virtually overnight turn tepid and stagnant.
This turn in the market usually does not happen unannounced but if you fail to have an ear to the ground in the right location, you will not know of impending market changes until you are affected by them! Consider also the fact that rental real estate investing within even the same zip code may be a completely different experience! One part of town may be up and coming with a steady influx of the working middle class or even the more well to do set, while another area may suddenly slide into semi dilapidation with graffiti vandals running rampant and clusters of the unemployed crowding around convenience store parking lots.
Add to this amazing differentiation the fact that the rental market will also vary from city to city, county to county, and state to state, and it is virtually inescapable that in order to profit from the red hot markets while escaping the negative cash flow problems of the cold and cooling ones you need to have the highly developed skills of a real estate investor business entrepreneur who knows the ins and outs of becoming and staying profitable, no matter where the market might lead.
To this end it is a worthwhile exercise to learn how to identify up and coming neighborhoods, understand the methodology you may employ to rank the neighborhoods, and how to get a jump on a neighborhood before the competition moves in and buys up the choice properties.
At the same time, you will want to be certain that you are also able to spot a neighborhood that has stagnated and where it is hard to tell if it is on the move and if so in which direction it is likely to go.
Of course, spotting a neighborhood on the decline is just as vital, and even though the tell tale signs sometimes are so glaringly obvious that there is precious little that can be done to avoid seeing them, at other times - especially at the onset of the decline - the signs are so much more subtle and it is the savvy real estate investor who will know to sell properties in that area at this point rather than suddenly being faced with a surplus of properties from fellow investors who are finally catching on to the downward spiral the area is taking.
The real estate investor who has made good use of a mentor and local investor experts will have learned not only how to tell the signs of the market but also how to build real estate teams which will be the eyes and ears on the ground as well as the driving forces that see a deal through to the end, will be the one left with the positive cash flow and the properties that produce it - no matter what the turn of the market might entail.
Here's to your success! Eric Bergman
Instead, you will find that the rental market is finicky and that there is only one sure thing in rental real estate investing: change! Areas that are considered hot and booming today, could quite possibly virtually overnight turn tepid and stagnant.
This turn in the market usually does not happen unannounced but if you fail to have an ear to the ground in the right location, you will not know of impending market changes until you are affected by them! Consider also the fact that rental real estate investing within even the same zip code may be a completely different experience! One part of town may be up and coming with a steady influx of the working middle class or even the more well to do set, while another area may suddenly slide into semi dilapidation with graffiti vandals running rampant and clusters of the unemployed crowding around convenience store parking lots.
Add to this amazing differentiation the fact that the rental market will also vary from city to city, county to county, and state to state, and it is virtually inescapable that in order to profit from the red hot markets while escaping the negative cash flow problems of the cold and cooling ones you need to have the highly developed skills of a real estate investor business entrepreneur who knows the ins and outs of becoming and staying profitable, no matter where the market might lead.
To this end it is a worthwhile exercise to learn how to identify up and coming neighborhoods, understand the methodology you may employ to rank the neighborhoods, and how to get a jump on a neighborhood before the competition moves in and buys up the choice properties.
At the same time, you will want to be certain that you are also able to spot a neighborhood that has stagnated and where it is hard to tell if it is on the move and if so in which direction it is likely to go.
Of course, spotting a neighborhood on the decline is just as vital, and even though the tell tale signs sometimes are so glaringly obvious that there is precious little that can be done to avoid seeing them, at other times - especially at the onset of the decline - the signs are so much more subtle and it is the savvy real estate investor who will know to sell properties in that area at this point rather than suddenly being faced with a surplus of properties from fellow investors who are finally catching on to the downward spiral the area is taking.
The real estate investor who has made good use of a mentor and local investor experts will have learned not only how to tell the signs of the market but also how to build real estate teams which will be the eyes and ears on the ground as well as the driving forces that see a deal through to the end, will be the one left with the positive cash flow and the properties that produce it - no matter what the turn of the market might entail.
Here's to your success! Eric Bergman
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