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Property Investment 101 for Beginners

Friday, March 10, 2017   /   by Jason Huerkamp

Property Investment 101 for Beginners

Property investment is the first step in building wealth for your enjoyment and even as your retirement alternative or supplement.

It seems quite simple really - you find a property, put in some tenants and they pay off your mortgage, and you can earn a pretty penny for very little effort - Nope - not quite how it happens.

Lets begin with your lesson in Property Investment

1. Types of Property Investment

Profit from your Property Investment comes in four different styles

  • Capital Growth
This is not a short term solution to getting rich quick. Capital Growth in your investment is usually seen over a longer period of time.
  • Positive Cash Flow
If you have less expenses than your have income, you are into positive cash flow. Any investment property over time will reap the benefits of higher income and stable expenses. This builds wealth, particularly if you invest the positive cash flow into another investment property.
  • Tax Benefits
Some Rental Property expenditure can be deducted from your taxes and because of this it could be a tax benefit, however, one should not invest in property with this in mind.
  • Rapid Growth
When buying a home that requires some remodeling, you can do the work and offer it for sale at an increased value and make a neat profit. This means buying right and having the knowledge of repair work in order to know that you can sell it for a good return.


2. Market Lows and Highs

Understanding the real estate markets highs and lows is very important when buying an investment property. If you buy in a high market, the chances are you may have to wait a while to get your money back. If you are in it for the long haul, its no big deal, the house will generally increase in value over time by default. 

If you buy that property in a down market, it can only get better over time. It's important to understand property cycles.

3. Location, Location, Location

When buying an investment property, look for the cheapest home, within reason, in the best location rather than the best most pristine home in a lesser location. Your investment can always grow in a good location because the top price will keeping moving up and the bottom price will grow by default. When you purchase the best home in a lesser location, the new purchase is the top price already.

When looking for an investment property be sure you do your homework properly and find the right location and the right property.

4. The Power of Money

It is important to learn how to leverage equity and to maximize your borrowing power in order to create your wealth. Always keep a financial safeguard aside for unexpected hardships, but learn about financing and your investment.

Learn to budget, find a smart Accountant to help you with tax and financial decisions you may not fully understand. Surround yourself with professionals. Work with a Real Estate Attorney and an experienced Real Estate Professional, someone who invests in real estate themselves. They will understand your needs and they will have an insight into what you expect to accomplish.

The Huerkamp Team are your real estate specialists in the Twin Cities and surrounding communities of Minnesota. We are ranked in the top 1% of agents nationwide! The Team is dedicated and experienced in the Twin Cities real estate market and we look forward to being your real estate agent for life! You will have a great experience buying or selling real estate.  We have many raving fans and the we pride ourselves in having the experience to deal with your real estate transaction.

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Jason Huerkamp
14300 Nicollet Court # 208
Burnsville, MN 55306
612-314-6330

The data relating to real estate for sale on this web site comes in part from the Broker ReciprocitySM Program of the Regional Multiple Listing Service of Minnesota, Inc. Real Estate listings held by brokerage firms other than are marked with the Broker ReciprocitySM logo or the Broker ReciprocitySM thumbnail logo (a little black house) and detailed information about them includes the name of the listing brokers.” Listing broker has attempted to offer accurate data, but buyers are advised to confirm all items.” Copyright2019Regional Multiple Listing Service of Minnesota, Inc. All rights reserved. Data last updated September 17, 2019