While most homeowners look at buying a piece of property as an “investment” in their future, many don’t realize how many ways you can truly invest in real estate. Real estate investing can be a very profitable way to make a living; however, it can be much more complicated than traditional stocks and bonds-style of investing.

Rental Properties – One of the most common ways that people get into real estate is by “buying and holding” properties, otherwise known as being a landlord. Buying rental properties is a great way to save up for your retirement, and is in no way a “get rich quick” method to real estate. The basic concept of buying and holding is that as a landlord, you will pay for the mortgage payment, taxes and maintenance of the property while charging rent to cover the expenses.

One of the most important things to know about buying and holding is that you want to look for properties that you can not only break even on, but ones that actually have a positive cash flow. Searching for a property with an estimated $200-$300 a month positive cash flow may be difficult, but it’s definitely not impossible. Since you are purchasing this property as an investment, it’s important to realize that it’s a long-term one. Since you will ideally own the property for 360 months, each month you can make a profit will really add up. Another reason you want to look for a cash flowing property is because it’s not uncommon for a tenant to skip out on rent or to leave the place a mess. While you can legally sue for damages, depending on the stipulations outlined in your lease, many times landlords never see that money.

Buy and Flip – A faster way to see a return on your investment is to buy and flip a property. However, like any other kind of investment, a fast and high return on your money comes at a price; a higher risk. Buying a fixer upper, fixing it up, and selling it is not for the faint of heart, and you’ll often hear that you should anticipate to spend twice the budget and three times the time as you might expect. More importantly, if you plan on taking out a conventional or hard money loan for the house, or if you want to finance the materials and expenses, you need to know how to get in and out quickly, since interest rates can eat up your profit each and every day.

For more information on real estate investing and to check out our Cherry Creek homes for sale, please visit us at PorchLight Realty.

About PorchLight Real Estate: PorchLight Real Estate Group has the most experienced and knowledgeable Denver real estate agents in Colorado. For more information about homes for sale in Denver CO or specific neighborhood homes please visit www.porchlightgroup.com.

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