Investor Frequently Ask Questions
What types of investment properties are best for beginners?
Single-family rentals and small multifamily properties are often good starting points.
How do I analyze whether a property is a good deal?
Look at cash flow, cap rate, ROI, and location trends — we provide tools and worksheets to help.
Do I need a large down payment for investment properties?
Typically 15–25% for conventional investment loans, though financing options vary.
What are the risks of real estate investing?
Vacancies, unexpected repairs, and market shifts. A solid strategy minimizes these risks.
Are there tax benefits to owning investment property?
Yes — deductions for mortgage interest, property taxes, depreciation, and expenses can all benefit investors.
How do I finance my first investment property?
Options include conventional loans, hard money lenders, private financing, or partnerships.
What’s a 1031 exchange?
It allows you to defer capital gains taxes by reinvesting sale proceeds into another investment property.
How do I calculate cash flow?
Cash flow = rental income – (mortgage, taxes, insurance, maintenance, and management costs).
What’s the BRRRR strategy?
Buy, Rehab, Rent, Refinance, Repeat — a popular method for building a portfolio.
How do I manage tenants effectively?
You can self-manage with screening systems or hire a property manager for a fee. Contact Mahogany Realty Group for more information.
Should I invest locally or out-of-state?
Both have pros/cons. Local allows oversight, while out-of-state can yield better returns in high-growth markets.
What’s the difference between residential and commercial investing?
Residential = 1–4 unit properties. Commercial = 5+ units, retail, office, or mixed-use. Commercial often requires larger capital but offers higher returns.
Do I need an LLC for my investment properties?
An LLC can provide liability protection and tax advantages, though it depends on your goals and state laws.
How can I protect myself from market downturns?
Diversify property types, keep reserves, and invest in stable rental markets.