Investing with Residential Real Estate

Is there a secret to buying real estate? Where should you start, and what should you do to to get the best return on investment?
Investing in residential real estate is about one of two things - either expected growth of the area in which you are purchasing, or positive returns from rental after all the bills are paid, or if you're really lucky, both.
So lets look into the idea of expected growth - first of all we need to identify places where infrastructure is being upgraded, and the government is putting up cash to inject into the area. So you find this out, you need to be looking for local council sites, or government sites that tell you about infrastructure projects that are being planned. You need to consider what that area is already like - if it is very run down, there is a big potential for upside, in terms of growth, but there is also a big risk - will the investment pay off, and will it do so longer term? Is there something in the investment, that is likely to lift the area, lead to more jobs, or easier accessibility? What facilities already exist in the area? Are there schools, a police station, shops, public transport near by, recreation centre, nice countryside - something that could give the place a wow factor. It is also important to try to understand why that area is not currently pushing the limits of growth - if the investment will negate that effect, then investing there will seem like a good idea.
Ultimately you need to be able to understand how the property will be geared - will there be a shortfall after all the bills are paid - is it negatively geared? This will attract tax breaks in some countries, but you have to remember that even so, you still have to be able to find the rest of the money. Over time, as the rent increases, you may find that the payments become more manageable, but don't bet on this, as there are no guarantees. If the property has money left over after all the bills are paid, this is ideal, as it will put money in your pocket - like a staff member working for you year round, and you only have to occasionally make sure that they have everything they need to keep going. If you have a positively geared property like this that you could purchase, this could be a great idea. With these sorts of properties, there is no point purchasing the property if it stands vacant for many months before getting this positive return, as the net return on the property will be negative. If such a property exists, it sounds like it would be a long way out of town, and therefore may also not get the capital growth that one closer to town might attract.

If you buy in an area where the property is negatively geared, you are assentially paying for the right to access the money that was lent to you by the mortgagee, which requires that it will increase in value to be worthwhile. In this instance if you get into somewhere that is a growth area, so long as growth occurs, then you can hold on to the property, and access its equity to buy yet more property. It's difficult to lose here, so long as you buy in an area that isn't going to have a large road built by it, or something that could equally lower the value of the area. Then aain, roads can also add to value.