Yes, it’s location, location, location plus the type of market needed to maximize your investment in residential real estate

 Guidelines to the Selecting the Best Market

1. Cash Flow

Formula: If the monthly rent income is in the area of 1% of the purchase price of the property, in most cases, this will cover principal, interest, taxes, insurance and other expenses resulting in a positive cash flow month after month for the investor.
Example: $1,000 of monthly rent is 1% of purchase price of $100,000

 2. Equity Buildup Over Time

Equity is accumulated by Appreciation Gains and Principal Reduction added to the down payment.
Formula: The market must have long term appreciation stability.
Example: If the annual appreciation rate for a market has been 4% to 8% for 15 to 20 years then it is likely that that rate will continue for the future producing a significant amount of equity in the property. What is to be avoided is a BUBBLE UP of 20% to 30% of annual appreciation and then a BUBBLE DOWN of 20%–30% of annual depreciation.

Locating the Right Neighborhood

Look at the schools, services and shopping available. Not all neighborhoods in a good market will maximize your investment.

Do your homework to locate your market. Selected locations in the I 35 Corridor from San Antonio to Austin are excellent for new duplex investments.