Investment in Rental Property

Basics of Real Estate Investing

Investment in rental property is a great way to build wealth and long term security.

In it's most simplified form, there are two basic ways to make money in real estate:

1. Buy bargain properties for a low purchase price



2. Increase value of your property by upgrades

Simple ideas, but not necessarily easy. Beginner real estate investors typically depend on lady luck to make money. They do not understand real estate risk and return on investment. To do that you have to learn some basic knowledge...and you have to be a little lucky. Real estate is not a risk free investment. Too many things are out of your control that can affect the value of your rental properties, such as:

• Interest rates



• Changes in tax laws



• Changes in local laws like zoning or rent control



• Acts of God



• litigation

Many people got lucky in the real estate bubble of the past decade despite no knowledge of fundamentals. And many got unlucky when the bubble burst.

However, there are ways to make rental property a low real estate investment risk. First, you have to identify all of the information that you need to become a good at investment in rental property. Some of this information can come from real estate experts. But if you don't know what you are looking for, how can you figure out what to ask?

This is a short list of knowledge that you should be aware of when buying rental houses:

• rental property law



• rental property tax deductions



• property management



• real estate financing



• rehab skills



• how to find bargains with motivated sellers



• rental property insurance



• how to appraise property



• home inspection



• real estate marketing



• how to flip real estate



• rental property accounting

You can learn real estate skills to help you. Here's the important skills you need to develop in the order of importance. Become good at:

1. Your rental property investment strategy



2. Property location evaluation



3. How to do comps



4. Borrowing money -finding sources of real estate loans



5. Making physical improvements



6. Property management - How to be a Landlord



7. Rental property accounting



8. Networking local Real Estate Investment Club meetings



9. Real estate legal issues

The first item - investment strategy - can best be solved by learning about Rent to Own Investing.

Don't be discouraged by the list of skills above. If you are not anxious to get rich quick and can become a patient investor, you can learn all of these skills and become an expert in many areas of investment in rental property. Tools are available, like Quicken Rental Property Manager for some assistance, while you can learn a lot from reading real estate books for just about everything.

Get started by viewing 50 tips for investing in rental property.

Once you learn the basics of investment rental property you will want to learn the process of buying foreclosed homes.

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