Buying Investment Property: The Basics

Buying Investment Property: The Basics

Real estate has been long been regarded as one of the most stable long-term investments, and for good reason: it is the biggest industry in America, and historically has created more individual wealth than any other business. This is according to Donald Trump, who should know. One of only 371 billionaires in the United States in 2006, his fortune was derived entirely from real estate. It is therefore no surprise that, given the popularity of infomercials and Trump's own televised testament to success, The Apprentice, many people have purchased rental property in an attempt to cash in on some of that wealth. If you are thinking of joining their ranks, here are a few basic rules that, if followed, will save you many a potential headache in your quest to become a real estate mogul.

Know your limits, and buy right.

One of the biggest mistakes new real estate investors make is taking on more financial responsibility than they can handle. If you are credit-challenged, work on improving your credit by paying down bills before you attempt to buy real estate. Despite what you may have heard, having a marginal credit score puts you at a distinct disadvantage in purchasing property. You will not be able to get the best interest rates available, which markedly decreases the chances that your purchase will generate sufficient income to cover your expenses. So if you haven't yet, take advantage of your rights as a consumer and get a copy of your free credit report by visiting www.annualcreditreport.com.