Income producing property in Chester
Housing in Chester still offers some good opportunity for investors however; they must recognize that there is a difference between buying investment property, and buying a residential home to occupy. The first difference is a property purchased for your residence is paid for by money you earn from another source, It should also satisfy your needs such as school, Church, bedroom size, transportation and even the view from the kitchen windows should be a consideration. The value of a residential property will best he determined by the market, that is comparing the property you want to buy with similar properties sold in the same community. On the other hand investment properties should be purchased only for the amount of income it will produce: or can be expected to produce, and it should pay for it self from that income. In buying an investment property, the neighborhood school is important
only if it adds to the durability of the income the property will bring in. The fact that the present owner invested considerable funds in the property, and the property is located in what is thought of, as a good neighborhood, does not mean that this property is a good investment, or that it should command a high sale price. This is a major mistake most often made by small investors. This mistake will cause the investor to have a negative cash flow. This was ok in the late 70’s and early 80’s. When the rich and high-income professionals, use negative income producing property as tax shelters, but for the small investor Real Estate investment with a negative cash flow frequently leads to hardship, and a sale of the property, at a loss of money invested from savings.
No one has ever become successful in the field of Real Estate by buying highly developed and desirable properties, (that is buying properties every one wants) Real Estate is just like all other investments that promise a high rate of return, it must be purchased when the price is low, the greater your risk the greater the income you can expect.
In the purchase of investment properties in Chester, a small investor must forget the concept of market value; that is to say a property can only have one correct marketable value at any one time. In contrast, investors must only be concerned with the value of the property to him. Under this condition, the value takes into account the investment financing, the after tax cash flows, and his desired rate of return on the savings he has invested. Using this concept, the value of the property is called investment value, it maybe less than, or greater than the market value. If an investor is willing to except some risk. Chester has a lot of properties that provide good opportunity, and can be purchased with a small investment. Another idea is to form a partnership: that will limit your risk, yet give you the chance to test the water. You must learn the laws coming out of Harrisburg, and Washington, that will pertain to housing, property rights, landlord and tenant, Crime, and the welfare system.
Chester in the next ten years will become a working class, bed room neighborhoods city; with the aid of government grants, and fair community lending policies by the banking institutions, the low income working citizens of the city will be able to purchase a home, or pay marketable rents for a decent place to live. Small investors will provide these places on average. All other businesses will increase and flourish because of the working class people that will be readily available for work in Chester. Chester will grow like wild flowers, when the city government recognizes that, Chester’s future lies in its abundance of affordable housing. They will then develop a more favorable environment for the small investor. By the development of this favorable environment, a lot more decent units of housing will be added to the market with little, or no aid from the redevelopment authority, and at no cost to the city tax payer. Then you will see Chester grow.