When it comes to adding and acquiring properties to your collection of real estate in Detroit, how do you chose what makes the cut? Rental properties are currently the hottest option for many real estate investors in Detroit, but deciding where to invest in the city seems to be the biggest challenge that these professionals face. We have a few tips and concepts for you to mull over the next time you decide to jump back into the market for a new purchase.
Consider Cash Flow
Cash flow is the balance between what you’re spending on a property and what you’re bringing in. When you’re looking at potential rental properties in Detroit, you’ll always want to consider what the cash flow on this property can help you achieve in the short and long term. The desire and hope that your property will appreciate over time is not enough to strategize on a potential investment. Focus on the cash flow that you can obtain now, and you’ll be more prepared to reach those financial milestones in the future.
Cash flow gives you options in the future
When you stick with the method of investing in rental properties largely based on their cash flow, you create more opportunities for yourself in the future. When your income has increased, hopefully your property has risen, or at least held its’ value, and you want to make changes to your portfolio, you will have the freedom to do so more easily. Cash flow allows you to accurately track your progress and ability for future investments.
Talk to the locals to determine your cash flow
Are you investing in an area that is unfamiliar territory for you in Detroit? Don’t be afraid to talk to local experts in the area, who can help you determine what your true cash flow will be. Knowing standard rental rates, unique facts about the property, and future construction in the area, will help you acquire a better cash flow estimate. The more you understand about your investment, the better prepared you’ll be for future investments.
The bottom line is that when you’re looking to invest in a new property, always consider your short and long term goals. When you stay on track of your goals, you are more prepared to make better financial decisions. What may appear risky to others could be a gold mine for you and your business!
