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People invest in real estate to realize financial gains. However, not all rental properties are sound investments. Before you invest in a rental property, it’s important to understand the potential return on investment (ROI). This allows you to evaluate a property’s potential profitability before you invest. You must understand the ROI concept and the calculations

Building a lucrative real estate portfolio requires ample time, access to capital and the right strategy. Many real estate investors are drawn to the fix-and-flip strategy to generate reasonably timely profits. However, this strategy requires an active commitment of time, energy and money. This commitment often extends for a year or longer in some cases.

Real estate is viewed by most people as a long-term investment, but it doesn’t have to be. Fix-and-flip projects can be incredibly lucrative short-term investments. These projects can yield a sizable return within a year or two in many cases, allowing the investor to realize and reinvest gains. Perhaps the most important aspect of optimizing

Traditional mortgages offered by conventional lenders are the most common way to finance real estate transactions. When a loan request conforms to the strict underwriting guidelines held by traditional lenders, the borrower can expect competitive interest rates and standardized terms and conditions. However, the requirements for FHA loans and conventional loans are too stringent at

When investing in real estate, a property’s net operating income receives ample attention. The NOI calculation tells the investor how profitable an investment is. This calculation serves other purposes as well. For example, it is a fundamental component in other critical ratios, such as the return on investment, the cap rate and the debt coverage

One of the many benefits of investing in real estate is the ability to leverage your investment. Leverage supports diversifying your portfolio, building wealth and optimizing your return on investment. However, when not used strategically and cautiously, it exposes real estate investors to greater risk. What Is Leverage in Real Estate? In real estate, a

Analyzing your expected rate of return on a real estate investment and comparing the return to other potential investments are essential aspects of making a savvy investment. A detailed ROI analysis, however, requires scrutiny of the numbers and takes time. The cap rate equation is often used by investors as a quick, back-of-the-envelope method to

What Is an STR in Real Estate? STR, also known as short term rental, is a rental property that is offered for a term of 30 days or less. With home-sharing and vacation rental platforms increasingly popular, the short term rental markets have seen a boom over the last decade. More STRs are available to

Investing in multifamily properties is an excellent way to diversify your investment portfolio. These investments provide more passive income and reduce your vacancy rates. When you invest in a single-family home, your vacancy rate will be 100% when a tenant moves out. By contrast, multi-family properties have multiple units. This means that even if one