Some methods of investing in real estate are very complex and take a great deal of money.
Investing in residential real estate is relatively simple, compared to investing in commercial and industrial properties. For a rather small initial investment, you can purchase, rehab, and rent out a residential property that generates monthly cash flow and produces long-term profits.
Residential Real Estate Investment Strategy
Every successful business has a solid strategy that’s proven to produce profits. The same is true with real estate investing.
Successful investors have an overall real estate investment strategy they use as a guide for every facet of the investment cycle, including:
- Property purchases
- Use of industry experts
- Geographical areas and property types
- Cap rate range
Learn more about formulating your investment strategy:
- 3 Property Investment Rules for Every Investor
- If You’re Investing In Real Estate, You Need an Exit Strategy
Risks Associated with Investing in Residential Real Estate
There are risks associated with every profitable investment. Likewise, there are risks associated with real estate investing.
Common risks associated with real estate investing include:
- Selecting a poor geographical area to invest (neighborhood)
- Purchasing a poor investment property that doesn’t generate cash flow or profits
- Investment property depreciates over time, rather than appreciates
- Poor selection of tenants who damage property
- High maintenance and management costs
Manage Risks and Increase Profits
Risk is a necessary component of a profitable investment. But by properly managing the risks associated with real estate investing, an investor can increase profits and build long-term wealth.
One method of managing risk is to become an expert in every aspect of real estate investing, which is not practical for most people. As a result, real estate investors use industry experts to some degree.
Simplify Real Estate Investing
You can simplify your real estate investing portfolio by investing in residential rental properties.
For self-managed investors, residential investment properties can be managed on a small scale by individual investors wanting to research prospective properties for purchase while managing properties they own. And on a larger scale, investing in residential rental properties is less complex than corporate real estate, and is simplified by using exceptional companies to manage the real estate portfolio.
At Graystone Investment Group, we help real estate investors by finding properties that we resell at discount prices, while also connecting investors with private financing. We also coordinate with rehab and management companies we’ve worked with for years, at no extra charge. To begin working with us, please fill out our Investor Profile or contact us directly at your earliest convenience.