A Division of Silverhawk Realty

Real Estate as an Investment

Purchasing property with the intent to boost your net worth can be a great idea, but it can also have the opposite effect if you’re not careful! The objective of this article is to help you determine if a property will be worth the investment. Will it be a cash earner, or cash burner? There are a number of items to check off the list before a property can safely be determined a positive source of cash flow, and below are some of the things you can do to help ensure you pick a winner.


What’s the point of putting an expensive diamond in a two dollar band? Make sure you can afford to pay the insurance needed to cover anything that may go wrong in the future. Look into additional coverage for fire, flood, tornado and earthquake if the property you plan to purchase is in a high risk zone and also research interior condominium and other applicable policies that will protect you and your investment.

Be a “Progressive Customer”

Especially when it comes to choosing a lender. That’s because not all lenders offer the same rates, so don’t be afraid to shop around and compare offers. Avoid the gimmick of a good interest rate deal. Instead, look for the best fees.

Investigate the Homeowner’s Association

The associations are in charge of general area maintenance as well as dictating the rules and regulations for it’s premises. It can be an amenity or a nightmare depending on the state of the association, which is why it’s important to know prior to purchasing if the reserves are empty. This can happen when too many units are unoccupied and there are not enough tenants to support the building’s expenses.

Title Abstract and Insurance

Aside from homeowner’s insurance, there is another policy you may not have been aware of. It’s called a title policy and it is put in place in the event that a situation arises that disputes your right to own the property. It could be that there was an error in the transfer, the previous owner did not own the property free and clear, or the ex-wife of a previous owner never signed off on the sale of the home in the first place. A title policy will protect against all this up to its maximum coverage unless stated otherwise.

Conduct a Home Inspection

Lastly, but likely most important, have a professional home inspection performed. It may seem like an unnecessary expense when everything looks fine and in order, but perhaps not to the untrained eye. You never know what pests, water damage or mold may be lurking beneath the floorboards of your to-be investment. The piece of mind that comes from knowing exactly what repairs need to be made prior to purchasing, will lend you the knowledge needed to proceed in full confidence that every expense is being factored in and that is priceless.


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