Posts Tagged ‘leveraging a real estate investment’

The Advantages To Leveraging A Real Estate Investment

Tuesday, March 22nd, 2016

Warning: Illegal string offset 'status_txt' in /home/britips/public_html/wp-content/plugins/share-and-follow/share-and-follow.php on line 1093

Warning: Illegal string offset 'status_txt' in /home/britips/public_html/wp-content/plugins/share-and-follow/share-and-follow.php on line 1093

Warning: Illegal string offset 'status_txt' in /home/britips/public_html/wp-content/plugins/share-and-follow/share-and-follow.php on line 1093

Warning: Illegal string offset 'status_txt' in /home/britips/public_html/wp-content/plugins/share-and-follow/share-and-follow.php on line 1093

Warning: Illegal string offset 'status_txt' in /home/britips/public_html/wp-content/plugins/share-and-follow/share-and-follow.php on line 1093

Warning: Illegal string offset 'status_txt' in /home/britips/public_html/wp-content/plugins/share-and-follow/share-and-follow.php on line 1105

Warning: Illegal string offset 'status_txt' in /home/britips/public_html/wp-content/plugins/share-and-follow/share-and-follow.php on line 1132

Real estate investors need to understand the advantages to leveraging a real estate investment, if they want to completely capitalize in this field.  For all intents and purposes, there are two forms of leverage, leveraging time and leveraging money.  Those investors who purchase rental property have the potential to leverage both of these aspects and should do so in order to benefit from their position.  First, investors should take advantage of monetary leverage by capitalizing on lender financing.  Second, investors should leverage their time by hiring a property management company to handle the day-to-day activities at a rental property.

Real estate investors who are interested in leveraging a real estate investment should have excellent credit and the ability to secure a low interest rate loan.  Since these investors won’t have to put all of their liquid capital into an investment, they assume a lower overall risk.  Since borrowing money from a lending institution comes with a relatively low interest rate, it only makes sense to most real estate investors.

Investors simply need to make sure that they are able to earn a monthly profit and capitalize on a positive cash flow when leveraging a real estate investment.  Since investors have to pay down the monthly mortgage, they must make sure that they are taking in more positive cash flow than negative cash flow theoretically.  Ideally, real estate investors should take all the time they need when calculating their potential cash flow, as this will determine the profitability of their investment.

Even those investors who have enough liquid capital to purchase a rental property generally focus on leveraging a real estate investment by taking advantage of financing.  The idea remains the same, as these investors are able to lower their risk profile by borrowing money, rather than spending money.  These investors can set their liquid capital aside for emergency expenses in order to ensure that they are able to pay down the mortgage on a monthly basis.

When leveraging a real estate investment, it makes sense to hire a property management company to handle the day-to-day activities.  A professional quality property management company will allow real estate investors to put their investment on autopilot.  While any good real estate investor will show up from time to time to check on their investment, those who hire a property management company to handle almost all the responsibilities associated with a rental property can enjoy their time, while collecting positive cash flow.

Investors who focus on leveraging a real estate investment should finance their rental property and hire a property management company to look after their investment.

Asking questions with these tips in mind will help save real estate investors thousands.  For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com.  We are the nation’s number one home buying franchise with over 15 years of experience.  Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business.  Come see us for more information.