When deciding to invest in stocks, bonds, real estate or commodities be aware of the potential pitfalls as well as the positive gains before preceding. Some of the positives and negatives below will help remind you of what to possibly expect when pursuing exchange property, real estate investment properties or income property .
GOOD:
- Cash flow with possible appreciation
- Depreciation tax write-offs and 1031 exchanges
- Long term tenants with little change over
- Location that keeps improving and increases in value
- Long term low interest loans that are assumable
- Increases in rents that keep up or surpass inflation
- Expense deductions like interest or repairs
- Triple net properties with no headaches or expenses
- Quality tenants that pay rent promptly
- Steady income
BAD:
- Poor tenant choices that don’t pay rent on time
- Unforeseen repairs like roof, hvac, plumbing
- No increases in rent
- Poor location that doesn’t go up in value
- Short term loan that comes due too early
- Higher interest rates before you sell
- Loss of tenancy causing less or no cash flow
- Additional fix up and lease fees to acquire new tenant
The good news are most of the potential problems can be avoided with the proper guidance and due diligence before moving forward on these real estate investments.
