42 REI MAGAZINE JULY
Five Key Factors to consider when buying your next residential investment property
By Jason Lee
Real estate books and social media experts are always telling everyday investors that they should be buying residential investment properties . For some these purchases make excellent investments , for others they can become a nightmare .
I have heard countless stories about these investments turning into unsuccessful and very stressful money pits . To avoid this happening to you I have penned my personal checklist of 5 key considerations I go through before committing to these deals .
1 . Exit strategy Starting with the exit strategy might sound strange to most but to me I am not prepared to commit to any deal until I know my exit strategy . The first consideration is will the capital gain on this property over the next 5 to 10 years be worth the equity injection on purchase and the ongoing admin and logistics of maintaining the property and dealing with tenants .
If I am going to inject equity into the project , I need to make sure that the return on that equity is better than simply putting the money into an index fund without the headaches of property ownership . I also want to make sure that if the property is not performing well or if my personal financial situation changes that the property will be attractive to another investor or end user that will take it off my hands .