Three Things that Make a Great Real Estate Investment

Investing in real estate can be tricky. Investors want to earn a return on their investments based on the risk and the amount of time required to maintain the property. A recent Forbes article highlights three factors that can make or break a real estate investment.
Pays a Fair Cash-on-Cash Return
Real Estate is a very liquid asset, which means it can be converted into cash quickly. For an asset to be liquid it needs an established market with enough participants to absorb the selling without materially impacting the price of the asset. As an investor, you should strive to earn a fair cash-on-cash rate of return on your real estate investment. To do this, it is necessary to buy cash flow-positive properties that earn decent returns.
Isn’t too Risky an Investment
Real Estate is considered a high-risk investment. To reduce risk, you must perform the proper due diligence, analyze the property, review historical reports and consider taking a fee simple title for the property in your own name or in the name of an entity you own.
Does Not Require a Lot of Time
Some properties require too much time and management responsibilities to make them an ideal investment. Work to establish long-term relationships with your tenants and invest in properties which are wholly owned, in good shape, and are cash flow-positive.
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