Top 21 Zip Codes for Real Estate Investing
hen searching, remember that not every property provides good returns, with some cities faring better for investing than others. We’ve determined the top 21 zip codes for real estate investing
5 Factors to Determine Hot Cities for Real Estate Investing
Rental growth is a powerful way to balloon your cash flow from a rental property. Here is why it works: Your mortgage is a fixed rate, and the rent is going up over time. If you purchased the property with a modest cash flow at the beginning, you have the potential to double your cash flow quickly.
Some of the zip codes analyzed had over 100% appreciation in a short amount of time. This increase in home value would vastly outpace the cashflow received from a property in that period. Relying solely on appreciation and not cash flow can change a solid real estate investment strategy into speculation. It is essential to focus on a mix of growth and cash flow in an investment property.
You may have heard the expression “cash is king.” If you are using real estate to advance your portfolio for retirement or financial independence, then your mantra should be “cashflow is king.”Cashflow provides a margin of safety as an investor. It allows you to save money towards capital expenses, future renovations, and unexpected emergencies.
Long Term Leverage
Over time, real estate builds wealth for its owner through the principal paydown of the mortgage. One way to think of the principal paydown on a mortgage is as a forced savings plan that your tenants fund. Ensuring a property cash flows is the key to long-term leverage. It’s a one-two punch as they compound off each other.
Click here to find out the top 21 zip codes for real estate investing!