Investing in Real Estate Part 2 - Expenses Associated with owning Rental Properties

In the first segment we went over the importance of getting clear on your investment goals and discussed three possible scenarios for real estate investment. The first is the fix and flip scenario – this type of investment can yield a quick return, but it is risky and hard to find in today’s market conditions. The second is an investment for cash flow. While the property may increase in value over time, the main objective here is to generate a passive cash flow. To achieve this, an investor will typically put a lot down and look for a property with low monthly expenses. The third is a buy and hold scenario. Here the investor is looking for long term gain and the appreciation over time. Typically, the plans on holding the property at least 7 – 10 years and may put as little as 20- 25% down. The rent should cover expenses initially, but over time the investor will see some passive income (in addition to the appreciation in value) as...