Real estate investment is probably the last investment anybody is considering right now, with the housing and mortgage crisis still fresh in everyone’s mind. But the real estate savvy are doing it and winning at the game. The fact is that people still need shelter. The American Dream is still alive. No one wants to rent if they can buy. It only makes sense.
Real estate investment is tricky and contains many pitfalls. One of these is the “Money Pit,” or the house that is just not worth fixing and should be bulldozed instead. Houses that fall into this category are often small houses built in the 30’s and 40’s with sub-standard building materials and practices, such as lumber that is too light for the job.
People still struggle to maintain houses that use 2″x 6″ studs for floor joists and roof rafters. To complicate the problem many of these homes have additions that are just as poorly built. An investor needs to be able to spot these right away and stay away from them unless the lot value is all they are after.
There have been plenty of investors who are new to the game to go into the slum business. Slum owners get old and think of retirement, so they sell off their houses. Many of them will do so using a rent to buy plan.
The problem is this: these are slum houses and are sub-standard and many are condemnable. There have been many to fall into this trap. Fortunately they usually lose only a few dollars and a lot of time trying to maintain these dumps.
When looking at real estate investment it is best to be sure the money invested can remain invested for a indefinite period of time. If a house is worth investing in, someone will eventually want it and buy it. A mistake many investors make is buying two houses when all they can afford is one. Neither house sells right away and they end up selling at a loss to get out from under the mortgages. This is a problem known as negative cash flow.
There are many homes for sale in Rochester MN that offer the investor opportunities to turn profits. Because of the proximity to the Mayo Clinic, many of the homes for sale in Rochester could become profitable rental property. A Rochester MN realtor can help the investor in finding these opportunities.
There is also the opportunity of developing lots and land in Rochester. There are plenty of undeveloped lots in Rochester waiting for a buyer to develop them. Townhouses and condominiums are also on the market. These also make excellent rental property. For listings of properties of this type, see or call a Rochester MN realtor.
Commercial property is another good investment. Tenants of commercial property usually commit to long-term leases making the cash flow of the property more stable. There are many properties for sale that come with tenants who are reliable and committed for a number of years.