Betting on future value of a property and equity.

2 Replies

I'm looking to purchase a SFH a ranch. If I buy this property and rent it I'll only get enough to make the mortgage every month. What I'm betting on the property value going up and equity because it's in a great neighborhood I think. The city is currently in the process of widening the road that runs along side the home and adding a traffic light and a subdivision is being built within a mile of the property. Has anyone bought a property under those pretenses.

@Mark Goodson Every investor is different and everyone has different goals. If that is what you want, then that is fine. I personally prefer to acquire a properties that also have positive cash flow.

I also prefer to purchase properties away from busy roads. Especially if those roads are going to be widen which might have negative effect of the value of the property especially in a residential zonings.

I would suggest talking to a local realtors about the property or even other properties in that area to get a better / professional advice.

It's really hard to predict the future or the potential appreciation of such properties but overall, those are not a positive factors i would want to hear especially if that is your first investment property and you are just getting started.

@Mark Goodson - the first big warning sign that you're not ready to go is when you said, "I think." You need to have good comping sources, a good handle on repair, maintenance, and holding costs before you can determine whether or not a deal is good.

And why bet on the future? There are plenty of deals that will give you cash flow today. I have invested in Greensboro and the surrounding 7 counties full-time since 2005 and can assure you that any appreciation you receive in this area is a gift and should never be figured into your income strategy. 

Never bet on the future. Buy deals that make you money today.