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One effective way of improving your wealth is to carefully consider the homes and properties you purchase, and to reduce your potential risk.
Here are 5 types of properties that have low risk involved:
Properties that are in very good shape
A lot of people buy fixer uppers in hopes of inexpensive remodeling and potential opportunity for wealth building. However, some don’t realize the immense amount of time, work, and risk, that goes into purchasing these types of properties. Buying homes that are in great shape reduce the risk by ensuring your value is there and you won’t have to work for it.
Properties in average priced areas with ample cash flow
When considering real estate one of the most important determinants in reducing risk is location! The most appealing locations such as beach areas and downtown neighborhoods are likely to be high-risk because of their negative cash flow. Working class area homes are generally less risky since the cash flow is much more positive. It is important to look at any deal with more conservative rates.
Communities with thriving HOAs
When you are buying a property in a common interest development you are also buying into the Homeowners Association. If there happens to be any trouble with legal or operational issues, then you will have to pay the cost. When considering low-cost and least risky properties you must take into account the health of the HOA. Be prepared to research and identify the state of the HOA in order to really determine the risk of investing in this community.
Properties from areas with low vacancy
Neighborhoods and communities with low vacancy are often poor choices when considering a potential home or property to invest in. These areas are more likely to experience burglary and vandalism. When looking at locations with a majority of unoccupied units be aware of the potential risk factors associated with these low occupancy areas.
Potential long-term properties
Whenever you are looking into investment opportunities the whole goal is to look down the line at the potential long-term return on investment. This is the same when investing in a home or property. Take your time to research and discover properties of high quality that provide opportunity for long term gain. You must always consider future variables that may affect your investment.