“These aren’t the droids you’re looking for.” ~ Ben Kenobi
When we’re hunting for our own home to live in, we often seek out the prize properties: the beautiful homes with lots of potential, situated on a beautiful lot. As property investors, we tend to sometimes get lost in a similar vision of what an investment property could be.
Being able to see a prize property for what it could be is a great skill to have when investing in property that you’d like to flip in the near future for an immediate return. However, when looking for investment property that you’d like to rent out – prize property is NO prize!
Here are just 5 reasons why:
- Monthly Cash Flow: In short, moderate properties cost less, which permits you to have a higher net operating income each month on your investment, after property expenses, loans, etc have been accounted for. Most prize properties don’t permit a high monthly Net Income, if any.
- Down Payment: The down payment for a prize home is going to be much larger than a down payment for a moderate home – this does not permit all investors to have enough cash left on hand for renovations and repairs.
- Difficult Rental Market: Most renters aren’t in the market for a luxury home – they’re in the market for a moderate home that is close to work and affordable.
- Landscaping and Pools: Most prize properties have extensive landscape designs – and sometimes pools! As a landlord, this is not monthly maintenance you want to add to your workload. Not to mention that these features open the door for added owner expenses and unexpected repairs.
- Property Taxes: Most prize properties have higher property taxes than moderate properties because taxes are based on the home’s assessed value. Imagine if taxes were as high as $6000 each year. This could quickly result in having a negative cash flow for the property – spending more money each year on your investment property than what you’re actually making from it.
When searching for investment properties with great rental opportunities you want to seek out the ones that are real prizes from a cash flow and investment standpoint. Remember, you aren’t going to be living at this property – it doesn’t need to be your dream home!
Unlike other wholesaling groups, we find properties that we resell to investors at discount prices, while also connecting them with private financing. We also coordinate with rehab and management companies we’ve worked with for years, at no extra charge.
Contact us today if you’re a new investor: (813) 449-4323, or fill out an Investor Profile to get started.
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