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Resi Dental Property Invest ment
Common examples of investment properties are apartment buildings and rental houses, in which the owners do not live in the residential units, but use them to generate ongoing rental income from tenants.
IT’S THE NICE, BORING, WHOLLY OWNED, IN GOOD SHAPE, CASH FLOW-POSITIVE PROPERTIES THAT ARE THE BEST INVESTMENTS. BUT IT’S NOT AS SIMPLE AS FINDING A PROPERTY ON THE MLS AND BUYING IT.
WHEN YOU BUY PROPERTY YOU ARE TAKING MONEY OUT OF YOUR LIQUID FINANCIAL ASSETS – STOCKS, BONDS, CDS – AND INVESTING IT INTO A VERY ILLIQUID ASSET – REAL ESTATE. YOU WERE EARNING A RATE OF RETURN ON YOUR FINANCIAL ASSETS, SUCH AS 4 PERCENT OR 6 PERCENT, AND YOU SHOULD STRIVE TO EARN A FAIR CASH-ON-CASH RATE OF RETURN ON YOUR REAL ESTATE.
