How to identify the best property for money?

Hello My Friends,
Every investor knows that the three key components to succeeding in real estate are location, location, and location. The problem is that we all assume that the most expensive location is the best location; it is probably the most desired, but it is not always the best for an investor. An investor needs to learn how to identify property that is not only highly desired, but also capable of producing a high return, regardless of the forecast prediction.
Location is a fundamental part of increasing your ability to sell during down cycles and leading the market on appreciation when the forecast trend is on an incline. The good news is that 99% of all locations go up in value over time. The task of the smart investor is to select property that meets their desired returns, and that a profit can be made when they decide to sell. With a lot of the profits being tied up in equity, do your best to select property that can meet its forecast, produce ample returns, and provide easy liquidation, regardless of the market condition.
For those of you who are perfectionists, like me, you will probably use the criteria set out in this chapter as a checklist for each property that you buy. But understand that this is not a requirement. Your primary goal when building wealth in real estate is to be certain that you are selecting a property that will yield the return you desire. By following some, if not all, of the guidelines set out in this chapter, you will, at a minimum, avoid a lower appreciation property.
An investor can only achieve maximum results by planning and measuring all financial results. You need to know how to calculate all the wealth accumulators before deciding to buy a property. The forecast gives you the ability to calculate the most important wealth accumulator: appreciation. But don’t forget about all of the other wealth accumulators! The equity building factors are listed below. They vary slightly for residential income property versus principle home ownership.
5 Wealth Accumulators for Your Principle Residence:
1. Appreciation returns over time, measured using a forecast prediction.
2. Principle payments made to a lender. These reduce the mortgage and so increase equity.
3. Tax incentives that the government provides to homeowners. These include mortgage interest and property taxes.
4. The amount that it would cost you to rent another residence versus owning your own property is a factor that needs to be calculated, since it is a fixed cost for any family.
5. Negotiate your purchase agreement with terms that yield favorable results in items 1 through 4 above.

5 Wealth Accumulators for A Residential Income Property:
1. Appreciation returns over time measured using a forecast prediction.
2. Principle payments made to a lender. These reduce the mortgage and so increase equity.
3. Tax incentives that the government provides to residential income investors. These include depreciation expense, mortgage interest, taxes, and operating expenses.
4. Income generated from cash flow over the holding period (purchase date to sale date).
5. Negotiate your purchase agreement with terms that yield favorable results in items 1 through 4 above.



Best Wishes,
Ed Ross