Investing in Cash Flow Properties in Grand Rapids

Grand Rapids, Michigan has some great investment deals available. Are you an investor looking to invest some of your funds in Grand Rapids, or the Kent County area? Let’s discuss some of the investing strategies we have used for creating cash flow portfolios in Grand Rapids recently.

The easiest way to create good solid cash flow is to own a multi-unit property. I will be focusing on residential multi unit investment properties in this article. For example, there are many 4 unit properties in Grand Rapids that my Realtors could show to you, but how do you ensure that they will make you money? Of course all investors know that there is no guarantee, but a good investor will reduce their risk by following some basic principals. Here are some things you need to ask when investing in real estate in Grand Rapids, MI (and anywhere else):

What are my investment goals? I am looking to hold a property for 6 months, or 6 years? A shorter term hold will focus more on equity, comparable sales, and somewhat on cash flow. A long term hold will focus more on cash flow, and potential future appreciation. Of course you still want to buy right, but I have seen some very high cash flow properties in Grand Rapids get low appraisals due to a lack of comps, but get very high rents. This is ideal for a long term hold.

Are there any potential major issues with this property? When purchasing investment property, you need to do your due diligence. Here are a few issues that you may overlook up front, but could cost you money in the future: Lack of split utilities. If you are purchasing a multi unit investment property, but the utilities are all on one bill, usually the owner gets stuck paying that bill. Sure, you can charge a little more on the rents, but a few extra cold months, or a tenant that cranks the heat and leaves a window open could eat up a good portion of your potential positive cash flow! Also be sure to thoroughly inspect big money items, electrical system, furnaces, roof, and foundation.

Will this investment make me money? If you are not sure of all the expenses that owning an investment property can incur, it is important to speak with someone that does. Our company specializes in Grand Rapids real estate investments, we own properties ourselves, and work with many that do. We would be happy to sit down with you for a free consultation. Be sure you know in advance if you will be hiring property management, or maniging the property yourself. Determine which utilities the tenants will pay, and which will be the owner’s expense. Don’t forget maintenaince costs, vacancy rates, lawn care, nad other little expenses.

It is also important to know what sort of tax breaks you can get for your property, what you can and can’t write off, so be sure to speak with a CPA about this!

Now is a great time to by investment real estate in Grand Rapids, and the entire Kent County area. The sale prices are low due to the number of foreclosures, and the demand for rental units is high. If you are thinking about investing in the area, contact us for a free consultation. You can also click here to get on our automatic foreclosure update list. It’s free, and will keep you updated on all available listed foreclosure fore sale in Grand Rapids and all of Kent County, Michigan.

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