Buying residential real estate as an investment and renting it out can be an excellent way of getting ahead financially
. Buying and holding real estate over the long term and then as the rents and values rise you can use this to leverage into more real estate until you have enough income producing assets to finance your lifestyle or retirement.
Of course it is not just a matter of buying anywhere and hoping for the best. It is vital to research and do your homework to avoid the many pitfalls that can catch you out and setback your plans for financial freedom.
There are many books ,newsletters and websites available on investing and the more of these that you read and research the better informed that you will be. In general it is better to stick with large cities that don't depend on one industry as there is a risk that with a downturn in that industry then the value of your real estate holdings will drop. Also well diversified cities are less likely to drop as far when the inevitable downturns come along.
Timing is another critical aspect of investing in property as you need to be careful that you are not buying at the top of a boom .This is a common problem as most people feel that they are getting left behind and then rush in to buy when it may have been better to wait for a correction.241In the US today property values are down and it is probably a good time to start researching to get in before the next upturn. While there is no need to rush in ,the more you can educate yourself and research the property markets ,the better prepared you will be.
Another way that you can lose out is by becoming over committed . Always make sure that you can afford the repayments and allow a buffer for unforeseen circumstances such as losing your job, interest rate rises and periods where your property is vacant.