Real Estate is still the best way to earn income. You see a lot of huge companies begging for your money to buy their real estate formulas. You come to meetings and ask questions about investing your money into their real estate and program. The meeting usually goes on for a couple of hours and you walk out ready to buy their real estate deals. The secret sauce is getting the middle man out of your buying equation. Lets look at the three steps.
Step one We find properties in good to excellent areas. Location is everything in real estate, you want to be located in areas that can see good appreciation. As I have mentioned in a previous blog a lot of my homes have seen $40k-50k appreciation from 1 year ago.
Step two look how many rentals are in a location you are looking at. Pretty easy to find how many rentals are in an area with the internet these days. If you see a lot of rentals in a area it usually means homes are hard to sale in that area and have to rent. Today we have a hot real estate market so it is easier to see which areas are selling and or still renting. We are currently doing a home for a client that is in an area with few rentals, and many quality tenants. The area should see some good equity growth.
Step Three look at both your income and possible equity growth. You say how can I calculate future equity? Look at the recent prices and compare them from last year that will help get you a gauge for future growth. I always do a 50% reduction on past growth to get what might happen in the future. I also watch consumer confidence overall which you can look up the trend on the internet. Consumer confidence is high right now and should stay that way for a while.
Overall you want to get a home that will earn you a nice monthly income and a in an area that can create equity.