My question for you today is, do you understand the risks involved in investing in real estate? If you don’t, stick around and I’ll fill you in on what some of those risks are.
One of the first risks involved in investing in real estate is the market cycle. Do you know what market cycle your investment property is in? Is it at the peak? Is it at the trough? Is it at the right spot to be buying?
It’s very important when you’re looking at buying in a community to know what that is. It’s also very important to know what the economy is doing. Is it doing really well? Is there a lot of immigration? Are there a lot of jobs available? Are there low vacancies in your building?
This is all important, especially if you are holding a buy hold property because a buy hold property works well though many cycles because in a buy hold market, you can generally go through the cycles because your collecting cash flow from your property and you also getting mortgage pay down which your tenant is paying for you and you are also getting market appreciation and going through a market cycle like that as long as you’re looking at a 5 to 10 year time span, you will do well on your investment. The worse thing that could happen to you is that you buy in for a 2 year or a 3 year plan and then the market goes down right at the exact time that you want to sell. Well, if your forced into selling you could end up not making very good money on your deal.
So, in your market cycles determine what strategy you are using and it if is a buy and hold strategy, it takes some of the risks out of say a flip and switch strategy.
If you liked that tip, stick around because I am going to be giving you a series of real estate tips over the next week or so and connect with me at [email protected]