Investing in real estate is not a new path to financial success. It is a well-worn path and it is so well worn because it is such an effective way to make a great deal of money in a relatively short period of time. But you have to be a forward thinker to make any serious money in the buying and selling of real estate.

The objective is to buy low and sell high and that means that you have to make a guess (an EDUCATED guess) as to what is GOING to happen tomorrow or next week or next year or ten years from now and not base your decisions on what happened yesterday, or last week, or last year or ten years ago.

The decision to invest in rental property is an important one. The first step in getting started is to choose the right property which will generate a sufficient amount of income for you while also requiring as little maintenance and upkeep as possible.

Ideally, it is best to develop a list that you can take with you when you begin the process of shopping around for the right rental property. This list will help to keep you on track and focused on what you should look for as well as what you should steer away from.

While you may not consider selling the property for some time and will instead be renting it out, it is still important to take into consideration the cost of any necessary renovations and repairs before you make a final decision regarding whether you will purchase the property or not. After considering these factors, you may find that it will actually be less expensive to purchase a property that is in better condition, although at a higher price than to purchase a property with a lower price that requires extensive renovations and repairs to get it ready to rent out.

You should always consider the condition of the property. Generally, it is best to keep in mind that if you come across a property with a price that seems too good to be true, there is usually a reason why the property is priced so low.

Think about the neighborhood that you grew up in. Your mom and dad bought the house when the subdivision was new. It isn’t new anymore. It isn’t on its way UP. It is on its way DOWN.

The residents and the buildings are all beginning to show their age. That is the nature of real estate. What goes up will eventually go down. You always want to buy when the area is on the rise and not when it is in decline. There are, of course, exceptions to this rule but there aren’t many.

In short; you need to find the hot markets when buying an investment property and in a nutshell, the hot market is where the people are GOING. Determining where people are going is the trick.

Buying in an area that is already popular can be a hot market providing you can make a good deal on the property but finding out about upcoming changes in the infrastructure can lead you to where people will be going in the future.

Infrastructure changes are such things as major highway construction, marinas or entertainment facilities. Basically, you base your real estate market investments upon the cold hard facts and not what you hope will happen or what your barber tells you.

Real estate investing is not an exact science. You always have to weigh the risk against the potential reward to consider the price of the property. You always need to make sure that you will be able to cover not only the mortgage payment if you have one, but also other expenses such as taxes and insurance. In the event the property is not occupied for a period of time, you will still need to meet all of those expenses so be certain that you can cover them before you obligate yourself.

Location is, of course, one of the essential elements of purchasing the right rental property as well. Keep in mind that properties that are located directly on a busy street may not be appealing to tenants who like a quiet and peaceful neighborhood. On the other hand, a property which is located near schools or parks will likely be more appealing to families.

Then there is always the ‘cool’ factor that shouldn’t be overlooked when searching for hot investment real estate. For example: in California, there is an area called ‘the Venice Beach’ area. There was a film made there a few years ago that was loaded with skateboarders and surfers. Suddenly, Venice Beach became a very ‘cool’ place to live and real estate prices soared! So don’t overlook ‘cool’.

Keep both eyes on large corporation expansion plans. When corporations build, expand, or even relocate the real estate market will boom simply because of the demand for housing and small businesses. If a Wal-Mart is going to be built in a town, can a McDonald’s be far behind? And all of those people who will be coming in to run Wal-Mart and all of the small businesses that it spawns will need housing.

Yes! Businesses can cause real estate prices to go up and can create hot properties for investment purposes!

Remember that old song that Kenny Rogers recorded, “You have to know when to hold ‘em, know when to fold ‘em, know when to walk away and know when to run”. Although the song was about gambling the advice is solid for investing in real estate.

Choosing what properties to invest in should be made strictly upon solid facts. A building permit for a marina is solid proof that a marina is going to be built and that the adjacent property values are going to go up.

Your cousin telling you that he HEARD that a marina was going to be built is NOT a fact. It’s hearsay and you shouldn’t bet a lot on hearsay! Investing in real estate is an excellent way to get a very high return but you really do need to know what you are doing to keep from losing your shirt.