Investing in real estate, done smartly, can set you up for residual income for years to come, if you go in prepared.
Total costs. When you’re buying apartments, office space or houses to rent—or even just investing in a cooperative investment group that does the same—make sure you account for the total cost of investment, short- and long-term. That means, taxes, insurance, maintenance, HOA fees (if applicable) and of course any loans on the property. Make sure you know the full sticker price before fooling yourself into committing to something you simply cannot afford.
Long-term prospects. Is the property in an up-and-coming, stable or declining area of town. Make sure you and your real estate agent do thorough homework on this. What looks good now may end up being a debacle five years from now if that part of town slides into general disrepair. Don’t get sucked into that if you can at all help it.
Property management. If you can, consider hiring a good property manager to run the day-to-day affairs of your investment. If you’re simply investing in one house, for example, it may not be worth it to you. But then you are responsible for all maintenance for your tenants. A good manager charging a modest fee can do wonders for your peace of mind!