What makes a good long term real estate investment? ANSWER – The investment builds wealth and provides cash flow, starting at purchase and growing consistently over time.
To accomplish this goal there are 6 key factors to consider.
They are: 1) buy with the market cycle 2) has good cash flow 3) the right location 4) quality property 5) quality tenant 6) and leverage.
MARKET CYCLE – if you buy against the market cycle you could end up loosing value immediately. Buying with it can build equity very quickly.
CASH FLOW – if there is good cash flow, then you are more likely to weather the storms that WILL arise.
RIGHT LOCATION – if it is in the right location – read neighborhood and or desirable location – then you are more likely to have a great tenant who will stay longer (see #5).
QUALITY PROPERTY – the condition of the property will determine how much you spend on repairs over time and how much your asset (house) will be worth later when ready to sell.
QUALITY TENANT – who occupies the property is important. Will they pay rent? Create problems with neighbors? Stay a long time? Tear up the unit?
LEVERAGE – this allows you to use your cash flow to buy assets, and builds wealth over time.
The more of these together, then the better the investment for the long term.
